mPayments Trust: Google or Facebook?

Familiarity breeds trust, it seems, especially when it comes to mobile payments. By now, everyone and his mother-in-law has seen last week’s survey results touting Visa, MasterCard and AmEx as the top three trusted brands when it comes to mobile payments, with PayPal posting a close 4th. The survey asked around 500 U.S. online consumers, I think, just one question: “Who would you trust with mobile payments?” The report’s author made a point of remarking that the U.S. Postal Service, that “bastion” of innovation and efficiency, came in well ahead of Google and Apple. Facebook who doesn’t really even have a mobile payments platform came in last, but still posted. Here is my take on these results.
(Related: Experts Debate Visa EMV and mPayments Mojo)

First of all, asking consumers their views on mobile payments is a little like asking them what it would be like to walk on the moon. Most people (in the United States at least) haven’t really done mobile payments, other than to use their phones to buy stuff just as they would when buying things online. So, it stands to reason that those institutions who have spent the last six decades and billions upon billions of dollars powering the payments systems that keep our transactions safe and secure – and educating us to that fact – should pop to the top of the list. After all, it is these payments instruments that are the most used, most familiar to us, and therefore, trusted to be used in just about every situation where payment is needed. The networks (and their issuers) also spent considerable time and money educating all of us over the last decade about the safety and security of shopping online. Making that leap of faith to yet a new world of commerce seems a lot easier to make with a brand that has had our backs, so to speak, for a very long time when it comes to payments and payments security.

It’s also not at all surprising to me that PayPal scored so well (even though they posted 4th, they were only a fly’s eyelid behind #3 AmEx). PayPal’s entire brand was built on security and trust – use a PayPal account to buy that collectable from Joe in Upper East Nowheresville so that you don’t have to share sensitive payment credentials with him. It’s also why, I think, that as a brand, PayPal has a strong going-in proposition with mobile payments. With 100 million active accounts worldwide now, there are lots of people who have also experienced a safe and secure transaction with PayPal online. It is that same familiarity and ease of use that has driven them to about $3 billion in mobile payments transactions since the start of 2011 and gives them, at least in my view, a slight leg up in igniting mobile payments. That’s, of course, if they solve the physical POS scenario in a sensible way.

Facebook, I find very interesting. It tells me not so much about Facebook and mobile, but the fact that they registered at all, gives me a little insight into the fact that consumers may be warming up to the idea of commerce and Facebook. Facebook, as a commerce platform, seems a no-brainer, but many have said that consumers just won’t trust it for commerce. This is one very small and probably unreliable data point, but directionally, I find it interesting.

I’m not even going to comment on the Post Office. I mean, give me a break. I like my postman and all, but judging by the number of times I get someone else’s mail, I am not so sure that I’d trust them to do mobile payments. And, aren’t they the ones who have been warning us forever never to send cash in the mail? Moving on…

So, where does that leave Google and Apple? Well, I am frankly a little surprised by the Apple showing, since the iTunes experience is so easy and used by like 200 million people worldwide. Maybe it’s because people feel just fine, thank you very much, pushing “buy now” when all that’s at stake is $.99 (or $1.29 if you buy music that is really popular). It’s an interesting insight for Apple though who, while quiet on the topic, is surely looking for a way to blow open mobile payments. And, from the looks of it, it won’t be via NFC either. My bet is on something far more immediate and more in keeping with their whole cool and hip experience – like bar or QR codes. A topic for another post – stay tuned!

As for Google, well, here goes. Does anyone remember back in 2008 when Google announced that it was going to not only organize all of the world’s documents, but your entire medical records, too? Google Health was touted as a way to manage all of one’s health information online, at no charge and accessed via a Google log-in. It obviously went over like the proverbial lead balloon, since it has since been discontinued. No one, and no one knows just how many no ones that was (Google won’t say) actually trusted that their information was going to be safe. Even though Google told people that their information was accessible only to them, the perception was that their most sensitive medical information would be searchable and so never went near it. Since everyone knows that Google makes its money by selling data about people’s online habits, and for too many people, it seems, the risk that medical/health records could somehow become part of that data pool was over the top. Fast forward and you find many of the same concerns expressed about Street View and other things that Google is involved in where people feel that their privacy is being compromised for the sake of Google’s business model. (More: Analysis: After Google Buys Motorola, What’s Next for the Payments Ecosystem?)

So, it’s not surprising that they scored in the second tier when people were asked about the notion of Google and mobile payments. But back to my first point, it’s hard to really know how to interpret that for Google, since people really have no frame of reference for what Google mobile payments will look like or how it will behave. The fact that they are partnering with MasterCard, the No. 2 trusted brand for mobile payments, would seem to put them in good stead once people have been exposed to just how their application will function. And, with their recent acquisition of Motorola and their commitment to being an open payments platform, the opportunity exists to embed Google wallets and other cool inducements into those wallets that promote wallet use via “trusted” payments brands that are loaded into those wallets.

While looking for stuff on this particular study, I came across another one done just a few short months ago (May of 2011) with a much larger sample in the United States and that also a few thousand people worldwide.  The survey methodology appeared quite rigorous, and I thought that the insights were probably a lot richer for predicting how the mobile payments players’ landscape will shake out.

In this survey, the distinction was made between trust, consideration and preference as inputs into adoption of mobile payments, which I thought was interesting. Consideration and preference were viewed as being dependent upon convenience and what I’ll call utility (my word – the report writers used ecosystem integration). The mash-up of these three criteria is a much more interesting predictor of adoption than simply looking at trust alone. For example, mobile carriers were highly trusted in many places but scored low on preference given the lack of utility and functionality. Not surprisingly, financial institutions rated high in all categories, but preference was higher in developing countries where convenience around payments is lacking but for using the mobile phone. For this survey, PayPal topped the list of most trusted brands for mobile payments because, across the board, it scored high on what I will call the “familiarity factor.” More people had actually experienced payments via the mobile using their PayPal accounts and thus felt that it was a trusted way to transact. Other solutions are either not as well diffused to score consistently high.

So, back to the question at hand: does the more recent survey spell doom for Google’s mobile payment ambitions, as that survey author intimated, and create a slam dunk for the top 4? That’s not my view. I think that everyone has a tough slog of it, with trust only one piece of the pie – but certainly an important one. Until mobile payments gets the convenience, preference and trust trifecta aligned, it probably won’t matter much who comes out on top of surveys asking people what they think about something they’ve never done and probably don’t fully understand just yet. And, all of the players are at different starting lines when it comes to those particular adoption levers. Who gets to the finish line first, is what we are all watching now and with great interest.

Karen Webster is the CEO of Market Platform Dynamics (MPD), a consulting firm that helps companies find, implement and monetize innovation. She serves as an advisor and member of the board for a number of companies operating in the payment, technology and digital media industries. More info here.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

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