Consumer habits are not yet achanging in the payments world, and it might take considerable incentives for them to do so. Even with a decline in the use of cash, cash and plastic are still the most common ways to pay.
According to Robert Flynn, managing director of Accenture Payments in North America: “Consumers are content to use cash and plastic for their everyday transactions, and while the use of cash is declining overall, it is the most commonly used form of payment – and consumers expect it to remain so in 2020. To shift consumers’ payment behaviors will take more than just providing another ‘me too’ mobile payments option; leading merchants will identify and provide next-generation, value-added services.”
Business Wire and a new report from Accenture report that 60 percent of consumers in the U.S. use cash at least weekly to make a purchase. That figure is down by 7 percent since 2015. But don’t get too excited, because although awareness of mobile phone payments increased by 4 percent, which is still nothing to get excited about, regular use of mobile payments were stagnant at 19 percent.
Other digital payments, however, are more widespread. More people are using PayPal, and that trend is expected to continue, and mobile wallets are expected to see a nearly 60 percent increase in adoption by the year 2020.
Why are mobile payments so unappealing?
According to Michael Abbott, managing director of Accenture Digital, Financial Services, North America, there is nothing particularly wrong with traditional systems, and consumers need greater incentives to switch. “The existing payments system isn’t broken, which is why consumers are not making a mass-move to mobile phone payments adoption – the incentives are not there yet … “Today’s mobile phone payments options provide basic, first-generation functionality; it’s like running an Atari game on an Xbox system – amazing underlying potential, but only providing a very basic offering. Consumers expect more in today’s fast-paced digital environment; just the ability to tap-and-pay is not enough. Payments providers need to bring the traditional card to life and create a real-time interactive experience for consumers.”
Another reason for not using mobile payments that was cited by consumers is the fear of unauthorized transactions. Three-quarters of U.S. consumers trust traditional card providers the most, followed by providers like PayPal, banks and established tech companies
Flynn, managing director of Accenture Payments in North America, said: “As open banking becomes more prevalent, driven by APIs, consolidated customer data will provide a full picture of the customer, giving payments providers the information they need to create unique and differentiated offerings. Winning in mobile payments is anyone’s game at this point.”
Although millennials and mass affluents are obvious early adopters, the survey found that all consumers are open to digital payments. One-in-five consumers are considering using wearables or smart devices to pay, which has increased by 2 and 3 percent, respectively, from 2015.
Strangely, consumers were most interested in being able to automatically pay for car parking.
And, even more strangely, those prayers have been answered, at least in Canada. Here’s the mobile news for the week.
Lost Your Car In The Lot? At Least You Don’t Need To Find Your Parking Ticket
For many, a large parking lot presents a bit of a challenge. Not for parking exactly, but actually finding your car when you need to leave, oh, and then finding the ticket when you need to pay. But in Calgary, a technology by PayBySky will at least take care of the payment. This fully autonomous payment service uses a small device located inside the vehicle that locates the car and submits a payment to the local Parking Authority’s ParkPlus account, according to Mobilepaymentstoday.
President Roger D’Hollander of Skymeter said: “The Skymeter removes the hassle and headache of paying for parking,” said PayBySky President Roger D’Hollander. “With the Skymeter, all you need to do is park your vehicle, walk away and let the system pay for your parking.”
PayBySky also proffers a trip log book, real-time vehicle location and driving behavior analysis – many will not want that last option. The Skymeter eliminates the need to use cash, credit cards, or a mobile phone to pay. The technology is considered another important step towards autonomous cars, and Skymeter wants to be a part of that revolution.
First Data Re-Ignites The Love For Clover Go
The Clover Go does sound like a new car model, but it is actually a POS device, and a fast one at that.
First Data has updated its Clover Go device, which accepts EMV, mag stripe, contactless transactions and NFC-enabled mobile payments, according to Mobilepayments today. The device processes EMV twice as fast as the previous Clover Go product. The new device will integrate with other Clover products so that a transaction can begin on any Clover device and be completed on the all-in-one Clover Go or the original Clover Go reader.
According to Mobilepaymentstoday: “a restaurant receiving a delivery order by phone can start a transaction on their Clover Station and complete it at their customer’s doorstep with the reader, facilitating a simple, in-person transaction, according to the announcement.”
The updated Clover Go app version also provides support for the new contactless, chip and swipe reader and a bundle plan for Clover merchants for all-in-one Clover Go without a new merchant ID or an upgrade to the register plan. There is a function to control inventory items, in-app troubleshooting and device diagnostics, access to web-based apps from the Clover App Market and the ability to function as a standalone POS or with the full Clover product suite.
Verifone Basks In The API Afterglow
Verifone has established a new mobile API standard, according to Business Wire. The company has brought together top mobile technology providers, POS manufacturers and fuel marketers with Conexxus. Verifone will deploy the new standard in convenience stores and gas stations, which will link mobile payments and loyalty programs for consumers.
Gray Taylor, Executive Director of Conexxus, said: “This is a great example of how the manufacturing, service provider and retail communities came together within Conexxus to update a critical industry standard.”
And Verifone is to be congratulated on taking a collaborative approach, which prevented proprietary interfaces across different service providers, which would have slowed consumer adoption.
“Further proliferation of closed solutions would have added significant technology complexity and support costs for retailers, making it difficult for them to select and deploy mobile solutions that best suit their needs,” said Dan Yienger, Senior Vice President and General Manager of Verifone’s Global Petroleum business.
“Verifone’s commitment to simplifying and enabling commerce is why we collaborated with our peers and Conexxus to set Mobile API standards for the industry as a whole.”
PayPal Faces Rejection
PayPal is the number one mobile payment app in the U.S., according to research by Parks Associates and by quite a margin. NFC World reported that 12 percent of those polled prefer PayPal while retail-branded apps are second at 9 percent and Apple Pay is at 4 percent. But it’s a bit of a mystery then why merchants are requesting Apple Pay much more than PayPal for in-store payments. A huge 67 percent are requesting Apple Pay versus 8 percent requesting PayPal.
Chris Tweedt, research analyst at Parks Associates, said: “While PayPal is the clear market share leader, more merchants are requesting information from Apple Pay than any other mobile payment solution.” Tweedt added, “Apple has added a Pay with Apple Pay button into its Safari browser and the company has signed up 21 of the top 100 online merchants, with others to come.”
While Google has launched an Android Pay function into its mobile Chrome browser, PayPal is relying on its popularity and its millennial-enamored app Venmo.
Tweedt is urging action to prepare for a mobile onslaught saying: “Merchants must be ready to accept mobile payments because those that wait will be at a competitive disadvantage …Users don’t spend much money with mobile apps today, but we expect to see a large increase — as much as 150 percent — in mobile payment users and transaction values over the next five years.”
But judging by the latest stats, this could be an exaggeration.
EMV Infiltrating The Hearts and Minds Of The U.S. Population
And what’s the status of U.S. chip migration?
The U.S. Payments Forum reports that almost 30 percent of U.S. merchants now accept chip cards, and about three-quarters of consumers carry at least one chip card in their wallet, according to Mobilepaymentstoday.
One of the main disincentives to mobile adoption continues to be security. The forum’s director, Randy Vanderhoof, addressed this problem saying: “As a forum, we are working to identify pain points with the EMV migration and address issues to help move merchant enablement forward, and help the industry reach the goal of widespread chip card acceptance to remove counterfeit fraud from the system more quickly.”
October marks the first anniversary of U.S. EMV migration in the U.S.