Mobile Payment Systems: What’s Holding Consumers Back?

    Since Near Field Communications was introduced by Sony and Philips in 2002, the promise of using mobile devices for payments has been the goal. But now that the technology is more readily available, its adoption is still creeping along at a snail’s pace. Numerous challenges stand in the way of consumers using their mobile devices to pay in stores.

    Stratos, maker of the Bluetooth Connected Card Platform, did a survey in late 2014 to find out what consumers really thought about mobile retail transactions—especially in terms of holiday shopping. The survey reached out to 400 smartphone users who varied in age from 24 to 50 years. Of this group, 64 percent felt that they would still use their credit cards to pay during the holidays because they “were accepted everywhere.” In that same vein, 54 percent said they “were simply used to paying that way.” Indeed, it’s difficult to teach an old dog new tricks—even one with a smartphone.

    Beyond the fact that consumers are still clinging to their credit cards with a death-like grip, one even more challenging fact to impede mobile payment system usage is a lack of availability among retail stores. Even though Apple Pay was introduced to great fanfare, since fall 2014, only just over 220,000 U.S. stores are providing the NFC readers for completing mobile transactions, according to the Wall Street Journal. Though recent numbers for stores accepting Google Wallet aren’t available, you can at least search for nearby NFC locations from the MasterCard site. But the need for this seems to indicate that there aren’t enough locations for it to yet be a ubiquitous technology.

    Out of sight is out of mind. So, if consumers don’t see the technology in use, they may not even consider using it themselves. This may be one issue that the industry needs to clear up to help the technology get off the ground.

    Andrew Sudbury, co-founder of Abine, which provides tools to protect online privacy, agrees that mobile payments are about ready to take off, but people shouldn’t expect to be able to rely on it heavily just yet:

    “Yes, I think ApplePay is going to make [mobile payments] ‘take off’ but I’m not going to stop carrying my wallet for years to come.  Apple has a good track record recently at successfully providing users with new experiences. So they have a real shot with ApplePay. However I’m not going to be able to stop carrying my wallet as there’s too many places where I don’t know if I’ll be able to use it, e.g. was the automated gate at the last parking garage you went to outfitted with NFC?”

    Sudbury pointed out that Apple Pay is currently the leader in mobile payments, but “in an ideal world there would be one standard for payments.” He added that we do have multiple credit card companies and various ways to make payments, so he thinks that for now at least, we will have to deal with multiple options for mobile payments, which can be confusing for smartphone users. If consumers aren’t sure which retailers accept their form of payment or actually have readers in place to accept it, they may be afraid to even look into setting up accounts.

    Another challenge in the acceptance of mobile payments may be the actual smartphones and mobile devices, because many smartphone users may not realize their phones can’t be used to make mobile payments. Older iPhones and Android-based phones aren’t NFC enabled, so if you haven’t upgraded in a couple of years, you can’t use these mobile payment options. Though it’s not yet ready for consumer use, the CurrentC mobile payment solution from MCX claims that it will work even on older phones because it relies on QR reader technology to complete transactions. If MCX can further secure the solution, CurrentC will be a solution that anyone with a smartphone can use, which sounds like a definite plus for this technology.

    Mobile Payment

    And security issues may be another stumbling block that the mobile payment industry must overcome before gaining consumer acceptance. When asked if there were any security features that vendors could add that might make consumers feel more secure in using mobile payment options, Gary Miliefsky, CEO of SnoopWall, said that adding layers of protection may be key:

    “Ultimately we all need a pin code (one of the factors of authentication) and possible challenge-response system. There needs to be encryption of data ‘behind the scenes’ so that these insecure protocols (Bluetooth or NFC) get the security wrappers they need to provide a seamless experience that’s much harder to man-in-the-middle attack.”

    Sudbury, on the other hand, doesn’t think that security issues alone make consumers uncomfortable about using mobile payments:

    “I’m not sure the real issue is that users don’t feel comfortable using their mobile devices. For example it appears that Touch ID makes user feel more secure, because they see thumb scanners in Mission Impossible movies, but arguably it’s convenience over security. Adoption of mobile payments will be driven by one of two things: a) force, by the payments providers requiring some form of mobile or 2nd factor authentication (unlikely) or b) making users want to do it, by making it better, faster, etc. for the consumer. Right now there are issues with mobile payments, such as ‘How do I pay at a restaurant?’”

    People I spoke with who have used their smartphones to make mobile payments have said that, indeed, they’ve found few places to actually use the technology. Troy Lyons, editor and writer for, says that he’s used Google Wallet mostly at McDonalds and other fast food restaurants around Louisville, Ky. He feels mobile payments will become a daily occurrence once people hear more about it and want to know more:

    “It has to be driven by consumers. Google Wallet has been available a lot longer than Apple Pay, but Google hasn’t really promoted it. With so many people having iPhone 6’s now they will start getting curious about it. It will still take a while. Look at how many people still write checks. 

    “Also chip and pin (EMV) is coming later this year to the US as the standard so when merchants upgrade their terminals to be in compliance they should also be able to accept NFC payments.”

    Russell Dale, tech worker for the education sector in the Denver area, feels that Google Wallet is secure and tries to use the tap-and-pay option often. However, he, too, feels that most stores are still lacking the equipment to receive such payments:

    “One of the problems I am seeing with Google Wallet and other ‘tap and pay’ services is that not very many businesses that I frequent are up and running with the technology, which is a disappointment. I think it is just a matter of acquiring ‘swipe systems’ that can employ the NFC contactless payments.”

    Currently, neither Lyons nor Dale know many other people who use mobile payment systems, which shows that perhaps word has yet to get out to the masses about this new technological payment revolution. Do you hear that, Google Wallet and CurrentC? It’s time to start some serious marketing.

    Kim Mays has been editing and writing about IT since 1999. She currently tackles the topics of small to midsize business technology and introducing new tools for IT. Follow Kim on Google+ at or Twitter @blumoonky.

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