A breakout of mobile proximity payments by age range forecasts that only 25 to 34-year-olds will surpass 50% adoption by 2021, rising from around 40% today, according to a new report from eMarketer. Other age ranges show more tepid interest — just 38% of 35 to 44-year-olds are expected to make mobile proximity payments in 2021, up from around a quarter today.
As age rises, the level of adoption sinks. A quarter of 45 to 54-year-olds are expected to make mobile payments in 2021, 13% of 55 to 64-year-olds and just 5% of those aged 65 or more. It is worth also noting that these adoption rates do not equate to habitual usage — the forecast is based around usage of proximity payments within the last six months, a low bar to achieve.
A gating factor on adoption may reside in the ongoing transition to EMV terminals, which typically come with built-in contactless capabilities, but there are more significant factors working against mobile wallet adoption that have nothing to do with the availability of accepting merchant hardware.
Getting people to use mobile payments requires teaching a new habit, and old habits die hard.
According to data published by BBVA on reasons for not using mobile payments, four out of five people found it easier just to use cash or cards and over two thirds of consumers said they didn’t see any benefit in using mobile payments.
This is worrisome for a number of reasons.
Shifting to mobile payments requires buy-in and regular usage for consumer behavior to change. If there is no tangible advantage to using mobile payments over other instruments then adoption will not occur.
Further, today’s consumers are more than a little paranoid around the security and privacy of mobile payments — 67% stated that they didn’t use mobile payments because of concerns around security and 47% stated that they didn’t trust the technology.
Again, these are serious barriers to adoption. Consumers who feel that their finances are at risk will stick to legacy payment methods that. while not actually more secure, are at least familiar and well tested.
An additional third of consumers perceive mobile payments to be difficult and/or time consuming to set up. This perception may be a symptom of reduced attention spans, but more fundamentally speaks again to the lack of a clear advantage to mobile payments over cards and cash. If the benefit of mobile payments outweighed the effort of enrollment, then this issue would be minimized.
So, what can be done to tip the balance in favor of mobile proximity payments?