Opportunities Abound for Better Mobile Payment Security
A new study from Oxford Economics shows that, despite convenience and a host of benefits, security concerns are the biggest factor holding back adoption of mobile payments and mobile accounting. With mobile usage and mobile device adoption growing at exponential rates, the research points to a significant opportunity for those who can figure out how to provide improved mobile security.
The benefits and convenience of mobile money transactions are clear to consumers and businesses, according to the study. Of 300 business executives queried, 72 percent believe mobile payments can boost their sales. And 62 percent of the 2,000 consumers interviewed felt that mobile financial transactions enhance their buying experience.
Yet 74 percent of consumers said they would be more likely to use mobile money if fraud losses were covered, pointing to a niche market that vendors have yet to adequately address. Consumers are also concerned about their personal identity information being stolen and a majority also believes mobile money is less secure than a physical wallet.
Despite these concerns, mobile payments are set to dominate within the next three years, rising from 16 percent to 47 percent of all payment methods. Companies who can address consumer and business concerns about mobile financial transactions will surely reap the rewards of this new mobile payment landscape. One of the best ways to tackle the problem is through education, along with biometric security features designed to combat fraud. Consumers are generally in favor of biometrics, with 70 percent requesting fingerprint scans or facial recognition as a security measure and 67 percent in favor of iris recognition.
Mobile security pioneers would also do well to demonstrate the cost benefits of new methods of payment to merchants and product providers as well as to focus on payment strategies that solve consumer problems. Partnerships will also go a long way toward securing the payment value chain and convincing business executives that mobile payments are the way of the future.
“Business leaders need to better understand the cost and security benefits of mobile payment technology,” states the Oxford report. “They need to review their assumptions about consumers' payment preferences. They need to reassure their customers that mobile wallets come with the same indemnification as old-school credit cards, and with greater protection against theft. Finally, they need to harness the technology’s potential for delivering the security, convenience, and rewards that consumers have come to expect from a payment system.”