Mobile NFC Unlikely To Take Off In The UK

The first days of a new year are usually devoted to predicting the trends that will surge during the year. ICM Research has debunked the myth of the rise of the mobile wallet in 2013 in the UK, despite the high smartphone penetration in the country (60%).

The researchers offer three main reasons why 2013 is not the year of the mobile wallet yet.

Reason #1: the market is not ready. ICM’s research discovered that contactless payment – which many consider the entry point for Mobile Wallet – is still very much in its infancy. Whilst consumer awareness is high at 80%, only 8% of people actually make contactless transactions. Firstly, a lack of retailer support with few terminals and little or no in store promotion. Secondly, widely held consumer security concerns have not been addressed.

Reason #2: smartphone users are not that tech savvy. Smartphone penetration is growing yet many smartphone users aren’t tech savvy. The responses ICM had from consumers about security concerns, and their willingness to accept pin numbers and other measures that go against the somewhat casual ‘wave and pay’ ethos of contactless paying highlight that there’s more work to be done to promote Mobile Wallet than simply increasing smartphone penetration. 32% of those who make contactless payments argued that would use this method more often if there were more terminals in place.

Reason #3: NFC isn’t keeping up. There simply aren’t enough NFC enabled smartphones which means many people can’t yet make contactless payments by mobile even if they wanted to. A major barrier to take up in 2013 is that smartphone users tend to be tied into long contracts, and people won’t break their contracts just to get an NFC enabled device.

However, the research also found that a third of consumers would definitely or probably use their mobile as a wallet to make payments, collect vouchers, to use as event tickets and on public transport. If the consumers’ willingness is there, it is up to retailers and mobile manufacturers to step up to their needs.