Mobile Payments Adoption Faster than Anticipated

Making payments or conducting banking transactions via a mobile phone or similar device will become widely accepted by consumers within four years, according to the latest global survey of business executives by KPMG.

The 2011 KPMG Mobile Payments Outlook survey of nearly 1,000 executives worldwide (including Ireland) primarily in the financial services, technology, telecommunications, and retail industries found that 83 percent of the respondents believe that mobile payments will be mainstream within four years, compared to only nine percent who see them as mainstream today.  In fact, 46 percent believe mobile payments will be mainstream much sooner – within two years.
 
"We believe that exploding smartphone growth and myriad opportunities will grow mobile payments at a much faster rate than our respondents anticipate," said Eamonn Russell of KPMG in Ireland. "The expected growth in consumer adoption of mobile payments globally gives Irish technology companies a great opportunity to broaden their product and service offerings to address this major trend in the payments market."

Russell notes, "A wide variety of options are ready for adoption, as several key players already provide, or are rolling out, mobile payment systems.  And interest among consumers is growing in line with the industry’s readiness to deploy them."

The study also found that worldwide:

• 58 percent of the respondents have a mobile payments strategy in place.
  
• 72 percent said that mobile payments are now, or will be, reasonably important in the future, with specialist online systems building on mobile’s leading position as a payment method, and m-banking and near field communication (NFC) gaining significantly greater traction than today.

Russell also highlights the role of financial infrastructure, "While there is consensus about the significant value of this opportunity among executives worldwide – the type and size of opportunity varies between developed and developing countries depending on depth and reach of the financial infrastructure in place."

"It’s also clear that those firms willing to engage in cross-industry partnerships and co-operation are more likely to succeed and dominate the market due to the complex set of business relationships required to deliver mobile payments to a mass market," said Russell.
 
Security and Privacy Concerns

While the majority of the business leaders surveyed believe consumers are currently concerned about security and privacy when using mobile devices, they believe other factors are more compelling attributes of a successful mobile payment strategy.  Specifically, 81 percent believe convenience/accessibility is the highest attribute, followed by simplicity/ease of use, at 73 percent, security, at 57 percent, and low cost, at 43 percent.  
 
At the same time, business leaders, globally, view security as the main challenge to developing mobile payment strategies. Technology and adoption of the technology is a distant second, followed by privacy.

Download the full report: 2011 KPMG Mobile Payments Outlook

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This article can be read on the KPMG website here