By Chanel Smith EMEA Editor
More than half of consumers in the UK have a smartphone, but only a small fracture of them are using them to make mobile payments in stores.
New research from MPayMe, a Hong-Kong based mobile solutions provider, reveals that only 10 percent of British smartphone users have made an in-store mobile payment. And if that wasn’t surprising enough—of the merchants operating on one of the most crowded shopping streets in the UK, only 7.5 percent of them can accept mobile payments. Despite the country’s buildup around mobile payments, the study implies that the hype is falling short for both shoppers and merchants.
The research surveyed 1,500 adult consumers in the UK to help gauge the current success of mobile wallets as well as collect consumer reactions.
Only a handful of British merchants said they were equipped to facilitate mobile payments. Furthermore, only 7.5 percent of the merchants working on Oxford Street—the busiest shopping district in Europe—reported that they take mobile payments.
MPayMe lists several reasons to help explain why mobile money is failing to launch in the UK, including putting too much focus on payments and not other forms of money or lifestyle management. The study states that the payments industry is not suffering; therefore it does not need new solutions.
The other problem that MPayMe underscores is the notion of fragmentation: This means that mobile payments is generally only a service that can be used online or in-store, which forces shoppers to download several applications for use. Moreover, the majority of mobile payment schemes are limited to domestic use only, unlike credit and debit cards that can be used Internationally.
“With one or two notable exceptions, the biggest retailers and merchants in the UK are slow in adopting this new technology,” Hooman Mazaheri, European CEO of MPayMe, explained. “It’s a similar picture for consumers too. The products currently being offered often have too many limitations and don’t offer the value or the utility to drive merchant and consumer adoption. When there are already well-established and traditional ways to pay, i.e. cash and cards, what’s the benefit of introducing a rival if it doesn’t come with added value?”
Lastly, the study warns that consumers are reluctant to adopt mobile wallets because there is a lack of security and reassurance. There is no guarantee on wallet replacements, and companies fail to make the commitment to customers that they will replace wallets.
“What’s needed is a solution that addresses the real and diverse needs of merchants and consumers. Yet another method of payment isn’t enough unless it comes with add-ons such as data and loyalty scheme management for merchants, and a relevant, versatile and wider-reaching customer experience for consumers,” said Mazaheri.
To read the full report by MPayMe click here.
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