This week I’m taking a brave step into the world of smart phones. Some (namely my web-designing brother) would have me feel like I’ve been living in the dark ages, but it got me thinking about the increasing buzz around mobile payments and being the slightly sceptical late adopter I am, how things might pan out.
Studies show around two-thirds of the population find the general concept of mobile payments appealing, but when it comes to the crunch, how eager will people be to take it up?
Sound arguments can be made about the dated technology that sits behind our current payment systems vs. the reliability and security of mobile payments, but the fundamental issue I see is where the burden of responsibility lies.
When it comes to day-to-day transactions the move represents a seismic shift in emphasis, from a supplied piece of plastic whose sole purpose in life is financial transactions, to a multi-purpose device where things such as compatibility, connectivity, software updates and, most importantly, security suddenly become issues for the consumer.
The beauty with credit/debit cards is responsibility for such things sits wholly with the provider, allowing people to go about their business in blissful ignorance, knowing there’s a reliable safety net in place should something go wrong.
There is a rational argument to say that we’re already in a similar place with online payments and banking, in that consumers need to take responsibility for their hardware’s security etc., but even then, most transactions lead back to that little bit of plastic in your pocket and the peace of mind that goes with it.
Another significant change from the consumer point of view will be the variety of providers vying for space, with a mix of financial institutions and mobile technology providers looking to own the relationship with the end-user. It will come down to who consumers trust most, their financial institution, their telecoms provider or someone new. In fact too much choice may daunt many, especially in a sector where trust is at the heart of everything.
Identifying the barriers and how to overcome them will be fascinating to research, and like many of these things it’ll surely be a gradual process. For many it might come down to something as simple as worrying about a flat battery, so it’ll probably end up being like an American Express card – you’ll always carry a back up should you find yourself somewhere that doesn’t accept it.
But for me, for the time being, while I’m walking around with a driving licence, Nectar card and library card in my wallet, I don’t think I’ll be in a hurry to ditch that small piece of plastic…
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