It is expected that mobile phone-based payments will not catch on significantly for another two to four years, according to a recent KPMG study. The report found that less than a quarter of consumers were willing to use their mobile phone as a substitute for other payment modes, with 30 percent of younger adults showing more willingness to do so.
Doubt among consumers and some businesses that smartphone payments are secure and easier than cash or card payments is one major impediment to its widespread use. The National Retail Federation’s Richard Mader contends that the universal adoption of smartphone payments requires consumers “to have the right amount of knowledge and education about the technology, and retailers must be able to accept mobile payments.”
Other near-term obstacles include the availability of contactless payment terminals and installation costs for merchants. Meanwhile, 71 percent of 970 companies polled by KPMG cited the need to address security concerns for mobile payments to succeed. Nevertheless, Aite Group data projects that pay-by-phone transactions will hit $2.1 billion in 2012 and $22.6 billion by 2015. Proponents say that phone transactions are safer due to the added software restrictions in place to prevent improper access to consumer data, while consumers are more likely to carry their phone more than any other device.