Mobile Payment Barriers: US Consumers
Findings from the most recent survey by Simon-Kucher & Partners on factors driving U.S. consumers’ mobile payment behaviors and ways to improve them revealed that the prevalence of (cash, credit cards, and debit cards), mobile payment security and data concerns, lack of confidence in using mobile payments, distrust towards app providers, and lack of adequate knowledge around this payment method, are examples of the major barriers to mobile payments for consumers in the U.S. The following section covers these factors in detail and includes statistics based on consumer survey responses.
DOMINANCE OF CASH, CREDIT CARD OR DEBIT CARD
- According to the survey by Simon-Kucher & Partners, 89% of U.S. consumers still prefer paying with cash, credit card, or debit card. The same survey further indicates that only 7.6% of the respondents prefer using mobile as a method of payment.
- An October 2018 study published by RootMetrics and IHS Markit showed that over one-third of U.S. smartphone users do not use mobile payment apps because they believe using a credit card or cash is easier (37.4%).
- Another 36.3% of the respondents in the RootMetrics and IHS Markit study worry that their data is not secure, whereas one in 10 respondents noted that they do not use mobile payment methods since they have experienced connectivity issues in the past.
MOBILE PAYMENTS SECURITY AND DATA
- Concerns about mobile payment security are among the leading barriers to mobile payment adoption in the U.S.
- Approximately 40% of survey respondents from the Simon-Kucher & Partners survey showed concerns over fraud and identity theft. Among non-mobile payment users, only 13% think that mobile wallets are secure.
- Another 36.3% of the respondents from the RootMetrics and IHS Markit study worry that their data is not secure, whereas one in 10 respondents noted that they do not use mobile payment methods since they have experienced connectivity issues in the past.
- Generally, security concerns plague mobile payments as expressed by over half of consumers of all ages.
LACK OF CONFIDENCE IN USING MOBILE PAYMENT
- The survey by Simon-Kucher & Partners indicated that about 70% of barriers hindering U.S. mobile payments revolve around the lack of confidence in using mobile payments.
- Among the top reasons cited by consumers include not being tech-savvy (22.9%), risk of losing phone (17.7%), fear of forgetting passwords (10.7%), fear they might make mistakes (9.1%), and frustration setting up the new payment feature (9.3%).
DISTRUST TOWARDS APP PROVIDERS
- Respondent’s to YouGov’s survey also cited distrust towards app providers (16%) and unfamiliarity with mobile offerings (17%) as some of their top reasons for not using mobile payments.
- The study also found out that consumers prefer mobile payment apps offered by their primary bank.
- 75% of the respondent said that they prefer to use a mobile payment app provided by their primary bank versus one offered by a software company, or another bank.
LACK OF ADEQUATE KNOWLEDGE REGARDING MOBILE PAYMENT
- According to Statista, besides security and consumer data concerns, there is also a general barrier to mobile payments for U.S. consumers resulting from the lack of adequate knowledge around the payment method.
- Findings published by Statista indicate that 17% of the respondents do not understand where mobile wallets are accepted, another 17% do not know how to access mobile wallets, 15% do not know what is mobile wallets, 15% do not know how to tap-pay using their phones, and 13% are unaware whether their phones offer that service.
Compilations on information regarding barriers around mobile payments for consumers in the U.S. are freely available in public. There are also several pre-compiled reports with the same data on various payments websites, market research reports, marketing websites, and business and finance websites. All five examples are barriers because U.S. consumers identify them as the core reasons why they are slow to adopt mobile payments. Moreover, these consumers have responded to survey questions that specifically seek to uncover the barriers that hinder them from using mobile payments. Importantly, the examples provided are repeated across the many sources we examined, and are presented as pre-compiled findings.
Unfortunately, there was no data in these reports we explored providing a geographic breakdown, specific to the U.S. geography that shows the particular concerns affecting people of a certain region versus another region. Most of these reports provided a demographic segmentation, specifically around generations, i.e., older (baby boomers) versus younger (millennials and generation Xers). Again, most reports available online on the subject reference the recent survey by Simon-Kucher & Partners, and many do not feature data on geographic segmentation.
Overall, while most studies on the subject are also relatively young, it is possible that the current focus of the study is nationwide to discover barriers affecting all U.S. consumers, versus region-focused studies, which are currently unavailable in public, and not included in the reported examined. In this regard, we concluded that findings in the reports examined are representative of the entire nation, and are not particular to any region.