Mobile Wallets Security a Major Incentive to Adoption, Study Finds

There is a distinct knowledge gap for most Americans when it comes to mobile payments security, a recent study published by ETA member JPMorgan Chase has found.

Though encryption, tokenization and sophisticated authentication technologies make mobile payments one of the most secure methods of payment at the POS, the majority of Americans feel that “more and better security features than physical payments cards” would incent them to use mobile wallets over other payment methods, the study found.

According to the research, among non-users of mobile wallets, concern for data security was the number one reason given for not using mobile wallets; 37 percent said that they would be incented to adopt mobile wallets if they were more secure than physical payments cards.

Perhaps unsurprisingly, only 33 percent of non-users said they were informed to some extent about mobile wallets, whereas 16 percent said they completely confused about mobile wallets. The remain 51 percent, a slim majority, felt they fell somewhere in the middle.

But what is more surprising is that even among mobile wallet “power users” — consumers who use mobile wallets weekly or daily and score highly in awareness of mobile wallets features — 49 percent said that knowing mobile payments were more secure than physical payments cards would make them use them more frequently.

These results indicate the need for merchants to educate consumers on the security benefits of mobile payments in order to increase adoption, the report said.

Despite the knowledge gap, the study said to expect a “new wave” of mobile wallet users. Forty-one percent of consumers are likely to try digital wallets in the next year and 55 percent of merchants say they are likely to upgrade their POS systems to accept digital wallets in the next 12 months, the survey found.

The study was conducted by Forrester Consulting via an online survey panel of 1,500 U.S. consumers over the age of 18 and 800 merchants across a variety of industries, the report said. The study ran from May 2017 to June 2017. Read the full report here.