A worldwide survey of business executives by KPMG International says that it may take about four more years for payments from mobile phones to become mainstream or widely accepted by people. Although new technologies are increasingly being developed to offer mobile payment services, it appears that people would need time to accept them wholly at a large scale.
In this survey, around thousand executives from financial services, technology, telecommunications and retail industry fields globally were interviewed. It was discovered that eighty three percent of executives felt that mobile payments would become mainstream within four years. On the other hand, only nine percent considered them mainstream as of now.
“We believe that exploding smartphone growth and myriad opportunities will grow mobile payments at a much faster rate than our respondents anticipate. A wide variety of payments is ready for adoption, as several key players already provide or are rolling out mobile payments, and interest among consumers in utilizing mobile payments is growing, in line with the industry’s readiness to deploy them,” explained Gary Matuszak, KPMG Global Chair of the Technology, Communication and Entertainment practice.
According to Seventy two percent of respondents, mobile payments are now or would be quite crucial in the future owing to m-banking and near field communication (NFC) achieving considerably more traction than today. Fifty eight percent of them said that they have a mobile payments strategy in place.
“While there is consensus about the significant value of this opportunity among executives across geographies and industries, the type and size of opportunity varies between developed and developing countries depending on depth and reach of the financial infrastructure in place. We believe that those firms willing to engage in cross-industry partnerships and cooperation are more likely to succeed and dominate the market due to the complex set of business relationships required to deliver mobile payments to a mass market,” opined Matuszak.
Most of the executives felt that consumers are currently bothered about the issue of security and privacy provided by mobile devices. According to eighty one percent of those surveyed, convenience or accessibility is the highest attribute, followed by ease of use at seventy three percent, security at fifty seven percent and low cost at forty three percent.
On the other hand business leaders across the world felt that security was the main hurdle to creation of mobile payments strategies. Technology and adoption of technology figured at a distant second position ahead of privacy at the last place.
Sanjaya Krishna, KPMG U.S. Digital Services Leader in the TCE practice stated, “The business leaders understand that when it comes to consumers choosing a provider based on security, reputation can make the difference, and any damage to a business’ brand can prove costly, even to the extent of being a showstopper. As a result, leading businesses are adopting multiple approaches to alleviate customers’ privacy and security concerns.”
Keeping the booming mobile payments industry in mind, respondents felt that quite a few players were expected to take on important roles. Out of these players, banks scored the highest in the value chain followed by credit card companies.
“While KPMG believes that these forms of mobile payment will all gain some traction, our view is that M-Wallet is one of the most exciting and promising payment opportunities. M-Wallet provides the momentum to move beyond payments to participate in the entire chain of mobile commerce, from consideration and brand awareness to purchase after-sales loyalty and care,” elaborated Tudor Aw, Technology Sector Head, KPMG Europe.
There are five methods of payments and all of them want a share of the market pie. The survey discovered that the executives viewed specialist online systems as pack leaders because this method already has much more penetration than alternatives and is expected to increase. This was followed by mobile banking, NFC, carrier billing and the ‘mobile wallet’ method.
The Global Mobile Payments survey studied the opportunities, leaders, barriers and advantages in mobile payments and was conducted by KPMG’s global Information, Communications and Entertainment practice. It covered the continents of North and South America, Europe, Middle East, Africa and Asia Pacific.