One of the biggest issues consumers have cited when it comes to their reticence to use emerging payment platforms like mobile and EMV is that they’re not sure it’s safe. This is perfectly understandable, given that they would have little to no familiarity with these systems and they’ve come to rely heavily on the traditional credit card swipe as their primary means of making purchases for years or even decades.
However, experts have long pointed out that the swipe payment method isn’t exactly as secure as many people might think, and that both mobile and EMV offer significant fraud prevention upgrades over magnetic stripe technology, according to a report from CNBC. This may be particularly true of mobile payments, for which users can build in a number of additional layers of security to ensure that even if a phone is lost or stolen, their accounts are unlikely to be compromised.
What kind of security does it provide?
Mobile can add layers of security because smartphones these days can be protected with passwords and biometric data like fingerprints or scanning eyeballs, the report said. In addition, individual mobile payment apps might likewise provide the ability to add passwords or other layers of security before people can use their phones to make a purchase.
“We need a more resilient model for payments, where I don’t have to transmit my bank account credentials to everyone I want to send a payment to,” Jeremy Allaire, co-founder and CEO of a mobile payment app, told the network’s Squawk Alley. “New mobile-payment based models are, in some ways, more secure. … I do think that the existing payment methods, like the traditional card models – there’s a lot of risk in that. You’re essentially giving out the keys to your bank account to everyone you do business with.”
What might drive adoption?
If consumers are reticent to use mobile payments, for any reason, it’s incumbent upon everyone from mobile app developers, payment processors, and even retailers to get them involved somehow, according to Mobile Payments Today. Data suggests that people might be enticed to use these platforms through incentive programs like those already popular at grocery stores and pharmacy chains, which automatically reward users for making purchases.
In addition, though, it might simply be a case of playing the waiting game for adoption to become more widespread, the report said. This is because millennials are most likely to use mobile payments on a regular basis, and as more gain financial independence the likelihood that they will adopt mobile platforms en masse increases significantly. By 2025, millennials and the age group that follows them (often referred to as Generation Z) will control nearly half of all income.
However, it wouldn’t necessarily be a good idea for merchants in particular to wait for more widespread use of these platforms before they start accepting them. Instead, those that adopt as soon as possible are likely to make the best connections with consumers who have also gotten involved early.Back To Blog