Payment methods like Apple Pay and Google Pay will be used by US consumers to make transactions valued at a total of US$78.6bn this year, representing 1.6% of all US brick-and-mortar retail sales, according to a new forecast from 451 Research.
“The reasons mobile contactless payments have yet to become a breakout success are many,” says analyst Jordan McKee. Top reasons include:
- Lack of a measurably better value proposition than plastic cards. Fifty per cent of non-users cited ‘a preference for using traditional payment methods’ and ‘no need/not interested’ as the reason they aren’t using contactless mobile payments.
- Limited merchant buy-in for value-added services, such as single-tap redemption of loyalty and rewards. Nearly one in three non-users say that the ability to ‘receive discounted offers on products/services’ would be enough to encourage them to adopt the technology.
- Security misconceptions. Non-users cited ‘security against fraud that is better than traditional payment cards’ as the top reason that would encourage them to use a digital wallet. Currently, however, only one in four believe that digital wallet transactions are very secure and only one in three thinks they are more secure than traditional credit cards.
“Consumer payment habits die hard, and without a measurably better value proposition, habitual behaviours such as reaching for a card from a leather wallet will beat mobile alternatives every time,” McKee concludes.