Businesses planning to bet big on mobile wallets may be underestimating consumer's apprehension.
Concerns about fraud and theft risks are inhibiting adoption of mobile wallets, yet nearly 60% of executives say mobile money will build their business because it is safer than alternatives like cash and cards, according to new research from NTT Data Consulting and Ingenico's ePayments division through Oxford Economics and Charney Research.
That disconnect is more apparent in that just over half of consumers feel cash is safer than mobile payments and nearly 75% say that guarantees against fraud liability would allay their fears. However, only 44% of companies currently offer or plan to initiate such guarantees.
“Fear is a powerful inhibitor, and fraud fear is top of mind for many consumers,” Peter Olynick, senior practice lead for retail banking at NTT Data, said in an Oct. 6 press release.
The companies surveyed 2,000 global consumers and 300 companies in August of 2016 to determine sentiments, expectations and concerns about the future of money. A full report is to be published in January, 2017.
“Consumers are not just worried about losing one or two transactions; they fear having their identity stolen," Olynick added. "If financial institutions can mitigate those fears and improve merchant adoption for mobile, we will see consumer adoption rates begin to accelerate.”
However, consumers understand the benefits of mobile payments, as 60% agree mobile enhances their purchase experience, and another 50% say mobile money drives loyalty to the financial institution or merchant.
Yet, only 25% of consumers say online and mobile transactions are the safest form of payment.
The survey indicated that more than half of consumers would like to see facial or iris recognition as authorization methods, but most businesses continue to rely on passwords or fingerprint scans.
In addition to bringing dynamic authorization methods into payment schemes and eliminating static passwords, the major card brands are also looking to implement the newest version of the 3D Secure protocol this year to accelerate mobile payment safety and adoption for e-commerce.