What Consumer Suggest Will Save Mobile Wallets

By Pete Rizzo, Editor (@pete_rizzo)

Like a manned mission to Mars, many see total consumer mobile wallet adoption as an inevitable, if predictable, conclusion to a current trend.

Despite how captivating such ideas can be, it sometimes feels unlikely that we’ll see them come to fruition in our lifetimes. This is especially true of mobile wallets in light of the technology’s recent, high profile struggles with both merchants and users.

However, a new infographic released by business insight provider M for Mobile indicates that consumers have a number of ideas that could help make mobile wallets more enticing.

M for Mobile’s report was compiled using insights from The Nilson Report, Frost & Sullivan, ComScore, ICM Research and others.

Most notably, the infographic reveals consumer-generated ideas that, if followed, may spur mobile wallet adoption. In this PYMNTS.com Data Point, we’ll break down these suggestions to determine whether they would be viable strategies for mobile wallet providers.

Incentivization Could Drive mWallet Use

M for Mobile indicated that 34 percent of consumers have said they would definitely or probably use their mobile phone as a wallet to make payments, collect vouchers and store event tickets and transportation passes. Younger consumers are particularly excited about mobile wallets. Five percent of 18- to 24-year-olds said they would definitely or probably use a mobile wallet, while 49 percent of respondents between the ages of 25- and 34-years-old reported this sentiment.

One key to increased adoption may be incentivisation. Consumers were 50 percent more likely to say they would use a mobile wallet provided they receive perks for doing so. In total, 51 percent said they would be strongly inclined toward using incentivized mobile wallet products.

Guaranteed Financial Losses Boost mWallet Confidence

Past research indicates that more than 50 percent of consumers are not interested in mobile wallets, in part because of security concerns. These fears are supported by past reports that show phones may have security flaws.

However, M for Mobile suggested that mobile wallet providers can overcome these concerns. It cited research that said 51 percent of consumers would use a mobile wallet if their worries about its security were assuaged. Forty-eight percent said they would be more likely to use a mobile wallet if their bank or mobile provider guaranteed their losses, and 43 percent said they would do so if they were required to enter a PIN with every transaction.

Can Consumer Suggestions Be Put Into Action?

For an answer to this question, we spoke to David Birch, director of the IT management consultancy group Consult Hyperion, which specializes in electronic transactions. Of the two consumer suggestions, Birch believes guaranteeing financial losses may be the right choice for mobile wallet providers.

“Because mobile payments are more secure than card payments, [banks and mobile carriers] will be able to do this without giving away too much margin,” he told PYMNTS.com in an interview. “My bank bundles mobile phone insurance with my premium account anyway, so it would be a natural extension.”

Mike Liebhold, a tech researcher and fellow at the Institute for the Future (IFTF), told PYMNTS.com he believes banks, mobile operators and tech giants will offer this incentive, but that the technology isn’t safe enough yet. Further, he suggested that NFC adoption could attract “bad actors” that could keep the technology from reaching this point. 

Birch also indicated there may be problems with offering incentives for mobile wallet use. He said that financial institutions should leave incentivization to retailers, as they could run the risk of “us[ing] up their own margin on incentives.”

For a closer look at the data surrounding mWallet use, view the full infographic here.