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Is Your Wallet Obsolete?

Mobile Commerce Insider Featured Article

July 08, 2014

Is Your Wallet Obsolete?

By Clayton Hamshar
Contributing Writer

A study performed by market research firm TNS (News - Alert) Infratest has revealed a rising trend of people willing to do away with physical payment methods, opting instead for their mobile devices.

Of 1,004 German consumers surveyed 27 percent would prefer paying with their smartphone for online store purchases, 30 percent like the idea for supermarkets and drugstores and 33 percent approve for both gas stations and public transport.

This is a fairly decent portion that will undoubtedly grow, especially considering the study surveyed consumers of all ages, and those that are younger tend to be more receptive to ideas of this type. It is clear the current system is unsatisfactory, however, as 83 percent of respondents under the age of 30 were “irritated” by checkout lines, and 28 percent would prefer a faster payment process of some type.

As smartphones continue to permeate the market, presumably the percentage of consumers keen to this change will increase as well. However, Germany already has a smartphone penetration of over 65 percent, which means that about a third of smartphone users are not onboard with a transition to mobile payments.

Image via Shutterstock

Most often cited is a fear of security issues. This sector of society is already quite tense with people guarding their financial information above few other things and identity theft a significant problem. Reassurances from mobile payment service providers are sure to be slow to convince, but as security improves and the idea permeates more fully it will presumably become a more accepted notion.

Many consumers also feel that the benefits of switching do not outweigh the drawbacks. A considerable infrastructure change is necessary to account for a new system of payment, and unless there is a way to cut back on lines it would only save about twenty seconds per transaction.

The idea may be more welcome online than in physical locations, as 43 percent of respondents in the survey between the ages of 30 and 39 and 30 percent of respondents over 60 are annoyed with the process of inputting financial information for online transactions.

As more and more aspects of society are digitized and mobile devices are constantly expanding in functionality and importance, it is inevitable they will one day become the basis of payment in most situations. Whether it evolves along the current path or in a way that we have yet to innovate, only time will tell.

Edited by Maurice Nagle

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