Will m-payments replace cash? Harris poll gives mixed answer.

Dec. 19, 2012 | by Suzanne Cluckey

Harris Interactive has released a new report gauging American's attitudes toward mobile payments and, for the ATM industry and other champions of cash, it's a glass half-empty/glass half-full scenario.

Two-thirds of poll-takers (66 percent) said smartphones would eventually replace payment cards. A similar percentage (61 percent) thought smartphones would mean the eventual end of cash, as well.

When asked how long the transition to mobile payments will take, 68 percent said the switch was still more than five years away. But judged by the rest of the results, "more than five years" seems like quite an understatement.

Consumers on mobile payments: 'Meh.'

In the Harris poll, consumers displayed a general lack of excitement about the idea of paying for purchases with a smartphone. Only about one-quarter (27 percent) of respondents reported any interest in using their smartphones to pay for in-person purchases. About three-quarters just weren't that into it.

Smartphone ownership itself could play a big part in determining mobile payment interest. Of those who own smartphones, nearly half (44 percent) said they were interested in paying for purchases with their phones.

Additionally, among certain demographics, especially Generation Y, or "Millennials" (ages 18–35), and Generation X (ages 36–47), the interest, regardless of phone type, is much higher. Of Millennials, 40 percent expressed interest in paying for in-person purchases with their phone; nearly one third (34 percent) of Gen-Xers said the same.

Men showed more interest in paying for purchases with a smartphone — 32 percent compared with 22 percent of women. Respondents with children at home also were more interested in mobile payments than those without. More than one-third (38 percent) of respondents in this group said they were interested in paying with a phone, while only 22 percent from households without children expressed an interest in mobile payments.

Respondents cited several reasons for their lack of interest, chief among them being a concern about security. Of respondents who said they weren't especially interested in mobile payments, 51 percent said storing sensitive information on their device was an issue, with 40 percent reporting that they worried about transmitting personal information to a merchant device.

More than half of survey participants (52 percent) said they just didn't see a benefit to mobile payments over cash or plastic, and half (50 percent) said they didn't even own a smartphone.

Interest in mobile payments increased slightly when the terminology used was "digital wallet." In other words, when respondents were asked about replacing their wallets with a smartphone to make payments and store identification and loyalty cards, 30 percent said they would be either somewhat more or much more interested.

More interested than they realize?

But while apathy might be the takeaway for mobile payment naysayers, the truth might not be quite that transparent.

In asking about mobile payments, the Harris poll specifically referred to contactless payments made with a smartphone. The question posed to respondents was "How interested are you in being able to use your smartphone to process in-person payments by tapping a special receiver?"

But when the survey inquired about consumers' experience with other forms of mobile transactions, it turned out that many, especially those who owned smartphones, were already conducting them.

Nearly one-third (29 percent) of smartphone users said they used a mobile app of some kind to redeem offers at stores or restaurants (40 percent said that they had at least seen such a transaction firsthand). And 23 percent of smartphone owners said they had used a mobile point-of-sale device such as Square to make a purchase.

A lack of compelling value

In summarizing the research findings, Larry Shannon-Missal, Harris Poll Research Manager, said the issue facing mobile payments seemed to be a perceived lack of a compelling value among consumers.

"Finding such a silver bullet [that] gives Americans a reason to change how they pay will depend not only on bringing new ideas to the table simply because technology enables them — but [also on] paying attention to how Americans pay now, and looking for a need that, once again, they may not even know is there," Shannon-Missal said.

In short, if mobile payments proponents want to create a world without plastic or cash, they're going to have to make a stronger case for it.

The Harris poll was conducted online from November 14–19 and surveyed 2,383 adults.

For more stories like this, visit the trends/statistics research center.

Adapted from a feature in the ATM Marketplace sister publication, Mobile Payments Today.

photo: cluck

Suzanne Cluckey / Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally.
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