Over 66% of smartphone owners are interested in mobile payments solutions while only 16% of those asked used their phone to place a purchase in the last 3 months. The report, “U.S. Mobile Wallet Roundup: Gauging the Future Potential of Today’s Solutions”, digs deeper into mobile payment adoption and compares consumer demands to actual real world use and adoption.
With only 16% of mobile wallet holders using their device in recent months, 73% of them are doing so less than 5 times a month. These numbers prove, while a small fraction of users actually use their smartphones to place payments, the majority of them are not “heavy users”.
“With the hype surrounding mobile wallets building on a daily basis, separating the signal from the noise has become increasingly difficult. The harsh reality is that despite billions in investment across the ecosystem, adoption of such mobile payment technologies has been far from illustrious. Just 16 percent of mobile device owners have used their phone to make an in-store payment in the past three months. More concerning, of those using mobile wallets, 73 percent are doing so fewer than five times per month,” Jordan McKee, analyst at Yankee Group, Boston, stated in the report.
While adoption rates are low, interest is high given that 66% of users are interested. So what is halting the mass adoption?
ACY Securities Supports ASIC’s Product Intervention OrderGo to article >>
A number of factors can contribute to the slow adoption rate. One of the main issues is device compatibility. Until startups like Clinkle unveil their groundbreaking universal technologies we are left looking at what we have available on the market now. The majority of mobile payment solutions are NFC based, thus ruling out iOS devices from technically being able to complete such a transaction. Manufacturer and carrier limitations also play a part by either disabling the feature, or forcing a pre-determined payment solution, limiting avaialbitiy. Google’s new version of Android does throw away with carrier limitations by offering Host Card Emulation, but with diverse fragmentation in the Android arena it may take some time until more devices are equipped with the option.
Interestingly enough the most used mobile wallet was not NFC based, with PayPal coming on top with 15% of users using the service to pay for goods. In second place by a large margin was NFC based Google Wallet with only a 4.2% adoption rate.
“As with all industries focused on a new technology, the mobile wallet space is characterized by high levels of saturation and an all-out arms race to proliferate. This, of course, is a significant factor inhibiting uptake,” McKee added in the report.