The UK ‘Is Still Holding Back’ On Mobile Payments

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Lack of knowledge is a big factor, but banks could be the key to getting consumers on board, VocaLink study finds

Many British consumers still need to overcome a number of issues before they can begin to properly embrace the use of mobile payments, a new survey has revealed.

VocaLink’s Next Generation of Payments Report, which surveyed 5,000 people across the UK, identified several of the problems that are stopping people from using the technology, not least in knowing which brands offer the services.

This is leaving a power vacuum which could well dictate which companies gain the upper hand in the mobile payments market, with nearly half (47 percent) of respondents believing that banks are well placed to take over and motivate them to start using mobile payment technology.

Opportunity

using smartphone mobile phone“Mainstream banks have the biggest opportunity, since mobile banking and payments are seen by consumers as an extension of a relationship that already exists,” said Cara O’Nions, marketing & customer insight director at VocaLink, which includes services such as Zapp and Paym.

“Respondents were much more likely to use new payment technology if prompted by their bank, as they trusted and indeed expected them to provide these services.”

However the respondents also found that there are several issues surrounding the mobile devices themselves. A quarter of current users, as well as 52 percent of people who expected to start using mobile payments soon, said that losing their phone was their biggest security concern around the technology.

This was followed by concerns over what happens if the battery of a mobile device carrying out a transaction runs out, which was cited by 23 percent of current users and 42 percent of expected users, showing that some responsibility also lies with the device manufacturers themselves.

Growth

Zapp - App mobile paymentOverall, however, VocaLink found that consumers do value the convenience of mobile banking, which is leading to a significant increase in the number of users in the UK.

Nearly half (46 percent) of smartphone owners said that they now used their device for some form of mobile banking, which is almost double the amount from two years ago, with 38 percent using a mobile banking app on their device.

And although checking bank balances was still the most common activity for customers (with 31 percent doing so) one in four mobile banking customers now uses their mobile to transfer money to other people, move cash between accounts and view transaction histories on a regular basis, as mobile banking becomes more of an ‘active’ process.

Looking forward, the majority of respondents were supportive of using biometric technology to access banking services and make payments. Only 29 percent said they would ‘definitely not use’ the technology for the former, with 28 percent saying for the latter, showing that banks would be well placed to start ramping up development on biometrics now.

“The mobile payments space is still in its infancy, but this market moves quickly and we expect big changes over the next few years,” O’Nions added. “Banks are uniquely placed to develop the next generation of payment services through compelling solutions that increase brand engagement and loyalty – but if banks want to take ownership of this space before one of their ambitious rivals does, they need to move quickly to make mobile payments the new norm.”

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