For all the advancements made in payments technology over the last few years, from contactless cards to mobile wallets, there’s still a long way to go before these solutions have a chance at toppling cash as the payment method of choice for many people.
Even though the proportion of cash transactions has been falling as solutions like contactless take hold, many consumers still place more faith in tried and tested methods. Some people prefer to use cash because it’s easier to budget, while there are rarely any questions as to whether a merchant will accept cash, unlike options like mobile.
However, another factor that may influence some people to stick with cash will be the issue of fraud. This is an area that’s still evolving quickly and many people remain doubtful that digital solutions can offer complete peace of mind.
A long way to go
Particularly when it comes to mobile payments, there remains a great deal of uncertainty amongst some people as to the security of the solutions, and providers have a lot of work to do in order to convince all consumers that it is a safe way to make a transaction. However, there is an expectation that this will be achieved in the long term.
A recent report into cybersecurity by the Institute of Electrical and Electronics Engineers (IEEE) found that 70 per cent of consumers believe that mobile payments will become secure enough to overtake the use of cash and credit cards eventually, but this is not likely to occur until at least 2030. Now I’m sure I’m not alone in thinking that this timeframe feels very pessimistic, but it does raise the point that we do have quite a way to go.
One factor in favor of mobile payments is that adoption of the technology is growing. Last year, although around half of people in the US had heard of mobile solutions, actual usage remained very low. However, this is set to triple in 2016.
The key concerns
The IEEE’s report highlighted a range of security concerns that will need to be addressed if mobile payments are to become a genuine challenger to cash and card payments in the coming years.
First and foremost, providers of such services will have to demonstrate to customers that the underlying infrastructure supporting the services is well-protected, as nearly half of consumers (46 per cent) expressed worries about hackers gaining access to payment details held on mobile solutions.
Given there has been a steady stream of news stories about enterprises falling victim to hacking attacks over the last couple of years – some of which have exposed millions of credit and debit card details – these fears are hardly unfounded. Therefore, it’s not enough for mobile payment providers to have security, they need to explain to their customers what their protections are in order to boost confidence.
Eliminating unauthorized payments
Consumers were also revealed to be worried that mobile payment solutions may allow transactions to be completed without their authorization. A third of respondents to the IEEE’s survey (33 per cent) said they were concerned about providers processing unauthorized payments.
What’s more, around one in eight people (13 per cent) were worried that it may be possible to make an unintended payment by accidentally scanning an NFC sensor or QR code.
Although there have been suggestions scammers are already using NFC technology to commit fraud, this is unlikely to be a practical issue in the long term. However, it does indicate how much work needs to be done before consumers are able to fully trust mobile technology as a solution for everyday payments. If we are set for a cashless future where everyone is dependent on their phone to make payments, it’s still a long way off.