While Exposure to Mobile Payment Grows, Concerns over Security and Lack of Compelling Reason to Use Tool Continue to be Key Roadblocks to Growth

New York, N.Y. – November 15, 2013 – Mobile transactions – running the gamut of everything from having your payment card swiped through a smartphone attachment to using mobile apps to redeem offers to tapping your smartphone to a special in-store device to pay for an item – are showing growth in the percentage of Americans who have experienced them firsthand. However, the segment – particularly in its tap-to-pay application – is still struggling to earn consumer interest.

These are some of the results of The Harris Poll of 2,577 adults surveyed online between September 18 and 24, 2013 by Harris Interactive.

‘Tap-to-Pay’ expectations mixed

Consistent with a 2012 Harris Poll, majorities of Americans appear to be anticipating tap-to-pay smartphone payments eventually replacing payment card (64%) and cash (59%) transactions (72% and 66%, respectively, among smartphone users) in the future – but not in the near future. Three in ten Americans (29%; 33% among smartphone users – down slightly from 32% and 38%, respectively, in 2012) believe such transactions will replace payment card transactions in less than five years, and one-fourth (26%; 29% among smartphone users – comparable to 26% and 31%, respectively, in 2012) believe it will replace cash transactions within that timeframe.

However, more smartphone users than in 2012 indicate that tap-to-pay transactions will never replace payment card (24% 2012, 28% 2013) or cash (30% 2012, 34% 2013) transactions.

Firsthand experiences on the rise…

Taking a step back, it’s been an eventful year for exposure to the smartphone payment realm. Americans – smartphone users in particular – are more likely than in 2012 to have either personally completed or witnessed firsthand each of a series of mobile transaction types, including (but not limited to):

  • Paying for a product or service with a credit card and having your card swiped through an attachment on the seller’s smartphone, sometimes referred to as Mobile vendor type transactions (Americans: 25% 2012, 32% 2013 / Smartphone users: 35% 2012, 43% 2013).
  • Processing a payment by tapping your smartphone against a special receiver at a store or other merchant, instead of using cash or a payment card (Americans: 13% 2012, 17% 2013 / Smartphone users: 18% 2012, 23% 2013).

…but interest declining for tap-to-pay

Looking at the consumer side of the equation, while tap-to-pay experiences may be on the rise, interest in using a smartphone to process in-person payments instead of cash or cards has dropped slightly since last year among Americans as a whole (27% 2012, 24% 2013) and more notably among smartphone users (44% 2012, 37% 2013).

  • Echo Boomers (35%) and Gen Xers (30%) display stronger interest in doing so than Baby Boomers (16%) or Matures (12%).

Among those not interested in using a smartphone to process payments, a simple lack of compelling motivation remains one of the top factors impeding interest, with 53% saying they don’t see any reason to switch from cash or payment cards. This also holds true for smartphone users where a majority (58%) don’t see any reason to switch from cash or payment cards either, although this perspective did decline a bit from 2012 (62%).

Security concerns are the other top impediment; 53% of those uninterested in using a smartphone to process in-person transactions also say they don’t want to store sensitive information on their phone, while nearly half (47%, up from 40% in 2012) don’t want to transmit sensitive information to the merchant’s device. Security concerns are also a worry among smartphone users, albeit with some changes since 2012:

  • Though over six in ten (62%) listed the fact that they don’t want to store sensitive information on their phone as a reason for lack of interest, it’s worth noting that this position softened from 68% in 2012.
  • On the other hand, the 55% indicating that they don’t want to transmit sensitive information to the merchant’s device represents a modest increase for this concern since 2012 (51%).

Consumers still waiting for Mobile Payment Motivations

Initiatives to ease the transition over to mobile payments, while moderately impactful on attitudes in 2012, also seem to be losing their footing. Just under one-fourth of Americans (24%) and roughly one-third of smartphone users (34%) indicate that being able to make mobile payments while still taking advantage of their existing credit card reward programs would make them more interested in doing so, representing drops of four and six percentage points, respectively from 2012 (when 28% of Americans and 40% of smartphone users said it would make them more interested).

The ability to use a smartphone as a digital wallet with electronic versions of all the identifications, loyalty program cards and other documentation normally carried in a wallet (thus freeing consumers to leave their wallets at home) experienced similar drops, with 26% of Americans and 36% of smartphone users (down from 30% and 43%, respectively, in 2012) saying this would make them more interested in doing so using a smartphone to make in-person payments.

Dwindling interest since last year may be an indication that the initial interest has fallen short with practical use, and has not yet been followed up by a constructive call to action by manufacturers and retailers, explains Aaron Kane, senior research director at Harris Interactive and a key consultant on Harris Poll TECHpulse, a new research product designed to track consumer awareness of and attitudes toward emerging technologies, such as mobile payments. Right now, the bottom line is that consumers don’t yet feel as if they’re being presented with a compelling enough reason to switch their payment habits, nor are they confident that these new methods are secure. This knowledge ‘gap’ represents an opportunity for companies to change the conversation by addressing these issues head-on.

For information regarding Harris Interactive’s TECHpulse research tool [email protected].

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TABLE 1a

EXPERIENCE WITH MOBILE TRANSACTION TYPES

[Summary Table]

Please select the statement which best describes your experience with each of the following types of transactions.

Base: All U.S. adults

Done this myself / Seen it done firsthand [NET]

I have done this myself

I have not done this, but I have seen it done firsthand

I have not done or witnessed this, but I am aware that it is possible

I was unaware that this is possible

%

%

%

%

%

Paying for a product or service with a credit card and having your card swiped through an attachment on the seller’s smartphone

32

19

12

50

18

Using a mobile app that allows you to redeem offers at a retailer or restaurant like you would use a coupon

30

17

13

51

19

Using a mobile scan as an airline, train, mass transit or other transportation ticket

20

9

11

51

29

Using a mobile app like a gift card to make purchases at a retailer, restaurant or other merchant

20

11

9

53

27

Using a mobile scan as an admission ticket to movies, concerts or live theater performances

19

8

11

53

28

Processing a payment by tapping your smartphone against a special receiver at a store or other merchant, instead of using cash or a payment card

17

6

11

56

28

Note: Percentages may not add to 100% due to rounding

 

TABLE 1b

EXPERIENCE WITH MOBILE TRANSACTION TYPES

[Summary Table Among Smartphone Users]

Please select the statement which best describes your experience with each of the following types of transactions.

Base: Smartphone Users

Done this myself / Seen it done firsthand [NET]

I have done this myself

I have not done this, but I have seen it done firsthand

I have not done or witnessed this, but I am aware that it is possible

I was unaware that this is possible

%

%

%

%

%

Paying for a product or service with a credit card and having your card swiped through an attachment on the seller’s smartphone

43

28

15

46

10

Using a mobile app that allows you to redeem offers at a retailer or restaurant like you would use a coupon

46

30

16

44

10

Using a mobile scan as an airline, train, mass transit or other transportation ticket

30

14

16

50

21

Using a mobile app like a gift card to make purchases at a retailer, restaurant or other merchant

29

17

12

52

19

Using a mobile scan as an admission ticket to movies, concerts or live theater performances

29

13

16

51

20

Processing a payment by tapping your smartphone against a special receiver at a store or other merchant, instead of using cash or a payment card

23

9

14

55

22

Note: Percentages may not add to 100% due to rounding


TABLE 1c

EXPERIENCE WITH MOBILE TRANSACTION TYPES

Done this myself / Seen it done firsthand (NET) Summary – Trended

Please select the statement which best describes your experience with each of the following types of transactions.

Base: All U.S. adults

Among Total Americans

Among Smartphone Owners

November 2012

September 2013

November 2012

September 2013

%

%

%

%

Paying for a product or service with a credit card and having your card swiped through an attachment on the seller’s smartphone

25

32

35

43

Using a mobile app that allows you to redeem offers at a retailer or restaurant like you would use a coupon

26

30

40

46

Using a mobile scan as an airline, train, mass transit or other transportation ticket

17

20

26

30

Using a mobile app like a gift card to make purchases at a retailer, restaurant or other merchant

16

20

22

29

Using a mobile scan as an admission ticket to movies, concerts or live theater performances

15

19

23

29

Processing a payment by tapping your smartphone against a special receiver at a store or other merchant, instead of using cash or a payment card

13

17

18

23

Note: Percentages may not add to 100% due to rounding

 

TABLE 2

EXPECTED TIME WHEN SMARTPHONE PAYMENTS WILL REPLACE CARDS/CASH FOR MAJORITY OF PURCHASES

Thinking ahead, please say when, if ever, you think smartphone payments will replace [INSERT] transactions for a majority of purchases?

Base: All U.S. adults

Total

Smartphone Users

November 2012

September 2013

November 2012

September 2013

%

%

%

%

Payment Card Transactions

EVER [NET]

66

64

76

72

In less than 5 years [sub-NET]

32

29

38

33

Within the next year

2

2

2

2

1 year to less than 3 years

12

9

14

11

3 years to less than 5 years

19

18

21

21

5 years to less than 10 years

19

18

21

20

10 years or more

15

17

17

19

Never

34

36

24

28

Cash Transactions

EVER [NET]

61

59

70

66

In less than 5 years [sub-NET]

26

26

31

29

Within the next year

2

2

2

3

1 year to less than 3 years

9

9

12

10

3 years to less than 5 years

16

14

18

16

5 years to less than 10 years

18

17

21

19

10 years or more

17

16

18

18

Never

39

41

30

34

Note: Percentages may not add to 100% due to rounding

 

TABLE 3

INTEREST IN USING SMARTPHONE TO PROCESS IN-PERSON PAYMENTS

[by Smartphone Users, Generation, Gender & Children in HH]

How interested are you in being able to use your smartphone to process in-person payments via tapping a special receiver, rather than using cash or payment cards?

Base: All U.S. adults

Total

Smartphone Users

Generation

Nov. 2012

Sept. 2013

Nov. 2012

Sept. 2013

Echo Boomers (18-36)

Gen Xers (37-48)

Baby Boomers (49-67)

Matures (68+)

%

%

%

%

%

%

%

%

Very or Somewhat Interested [NET]

27

24

44

37

35

30

16

12

Very interested in using my smartphone instead of cash or cards

8

8

16

13

12

13

5

2

Somewhat interested in using my smartphone instead of cash or cards

19

16

28

24

24

17

11

10

Not very or Not at all Interested [NET]

56

59

47

55

52

55

61

70

Not very interested in using my smartphone instead of cash or cards

12

13

16

19

18

15

10

8

Not at all interested in using my smartphone instead of cash or cards

43

45

30

36

34

40

51

62

Not at all sure

17

18

9

9

13

15

23

18

Note: Percentages may not add to 100% due to rounding

 

TABLE 4

REASON FOR LACK OF INTEREST IN USING A SMARTPHONE TO PROCESS PAYMENTS

Why aren’t you interested in using a smartphone to process payments instead of cash or cards?

Base: U.S. Adults Not very or Not at all interested in using a smartphone to process in-person transactions

Total

Smartphone Users

Nov. 2012

Sept. 2013

Nov. 2012

Sept. 2013

%

%

%

%

Don’t see any reason to switch from cash or payment cards

52

53

62

58

Don’t want to store sensitive information on my phone

51

53

68

62

Don’t want to transmit sensitive information to the merchant’s device

40

47

51

55

Don’t use a smartphone

50

38

Worried that my smartphone might lose data service / connection (out of range, underground, etc.) and leave me unable to pay

25

27

32

36

Worried that my smartphone’s battery will run out and leave me unable to pay

15

18

22

27

Don’t understand how to use it

8

9

8

8

Don’t know where I can use it

7

9

9

11

Something else

7

8

6

8

Note: Multiple responses allowed.


TABLE 5

IMPACT OF CC REWARDS PROGRAMS ON INTEREST IN USING SMARTPHONE TO MAKE IN-PERSON PAYMENTS

If you could use this type of ‘mobile payments’ while still taking advantage of your existing credit card rewards programs, how would this affect your interest in using your smartphone to make in-person payments?

Base: All U.S. adults

Total

Smartphone Users

Not interested (NET) in using smartphone to make in-person payments

Nov. 2012

Sept. 2013

Nov. 2012

Sept. 2013

Nov. 2012

Sept. 2013

%

%

%

%

%

%

Much more or Somewhat more Interested [NET]

28

24

40

34

8

9

Much more interested

9

8

15

12

1

1

Somewhat more interested

18

16

25

22

7

8

No impact

43

44

46

49

60

56

Somewhat less or Much less Interested [NET]

9

10

8

10

14

14

Somewhat less interested

3

2

3

3

4

3

Much less interested

6

7

5

7

10

11

Not applicable

20

23

6

7

18

20

Note: Percentages may not add to 100% due to rounding

TABLE 6

IMPACT OF DIGITAL WALLET ON INTEREST IN USING SMARTPHONE TO MAKE IN-PERSON PAYMENTS

If you could also use your smartphone as a ‘digital wallet’ with electronic versions of your driver’s license, health insurance cards, loyalty program identification, and anything else you might normally carry in your wallet – thus allowing you to leave your physical wallet at home – how would this affect your interest in using your smartphone to make in-person payments?

Base: All U.S. adults

Total

Smartphone Users

Not interested (NET) in using smartphone to make in-person payments

Nov. 2012

Sept. 2013

Nov. 2012

Sept. 2013

Nov. 2012

Sept. 2013

%

%

%

%

%

%

Much more or Somewhat more Interested [NET]

30

26

43

36

12

12

Much more interested

8

8

12

12

2

2

Somewhat more interested

22

19

31

25

10

10

No impact

46

48

37

41

55

54

Somewhat less or Much less Interested [NET]

24

26

20

23

33

34

Somewhat less interested

6

7

7

10

8

9

Much less interested

18

19

14

13

25

25

Note: Percentages may not add to 100% due to rounding


Methodology

This Harris Poll was conducted online within the United States between September 18 and 24, 2013 among 2,577 adults (aged 18 and over). Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents’ propensity to be online.

All sample surveys and polls, whether or not they use probability sampling, are subject to multiple sources of error which are most often not possible to quantify or estimate, including sampling error, coverage error, error associated with nonresponse, error associated with question wording and response options, and post-survey weighting and adjustments. Therefore, Harris Interactive avoids the words margin of error as they are misleading. All that can be calculated are different possible sampling errors with different probabilities for pure, unweighted, random samples with 100% response rates. These are only theoretical because no published polls come close to this ideal.

Respondents for this survey were selected from among those who have agreed to participate in Harris Interactive surveys. The data have been weighted to reflect the composition of the adult population. Because the sample is based on those who agreed to participate in the Harris Interactive panel, no estimates of theoretical sampling error can be calculated.

These statements conform to the principles of disclosure of the National Council on Public Polls.

The results of this Harris Poll may not be used in advertising, marketing or promotion without the prior written permission of Harris Interactive.

The Harris Poll® #84, November 15, 2013

By: Larry Shannon-Missal Harris Poll Research Manager

About Harris Interactive’s TECHpulse Research Tool

TECHpulse is a multi-client product development and marketing research-based tool that provides trendable business information on consumer consumption and attitudes towards a variety of technology categories (i.e., Wearable Technologies, Mobile Payments and more). It also delivers strategic consumer insight into new and emerging technologies to support business decision-making. Companies can use TECHpulse research to…

– Fine-tune existing product lines

– Develop new product lines

– Help prioritize feature development

– Help with feature packaging and pricing

– Guide the direction of technology strategy

 

About Harris Interactive

Harris Interactive is one of the world’s leading market research firms, leveraging research, technology, and business acumen to transform relevant insight into actionable foresight. Known widely for The Harris Poll® Harris offers proprietary solutions in the areas of market and customer insight, corporate brand and reputation strategy, and marketing, advertising, public relations and communications research across a wide range of industries. Additionally, Harris has a portfolio of multi-client offerings that complement our custom solutions while maximizing a client’s research investment. Serving clients worldwide through our North American and European offices, Harris specializes in delivering research solutions that help our clients stay ahead of what’s next. For more information, please visit www.harrisinteractive.com.