The payments industry talks about mobile payments as if they're the future, but in their current guise are they really doing enough?
New research from MPayMe indicates that mobile money just isn't living up to the hype – failing to deliver for both consumers and merchants alike. The major reason seems to be because it's technology that's heavily focused on and around payments – an area that MPayMe believe isn't broken or in need of being fixed.
The consumer surveyed 1,500 UK adults and showed that, while there's a wide selection of mobile wallets – with over half of the UK population owning compatible smartphones – less than 10 per cent of smartphone users made a PoS payment.
Very few merchants were set up to accept mobile payments too. the ZNAP survey examined merchants on Oxford Street, London – Europe's busiest shopping district, and found that only 7.5 per cent of them were able to accept mobile payments.
"With one or two notable exceptions, the biggest retailers and merchants in the UK are slow in adopting this new technology," explained MPayMe's European CEO Hooman Mazaheri.
"It's a similar picture for consumers too. The products currently being offered often have too many limitations and don't offer the value or the utility to drive merchant and consumer adoption. When there are already well-established and traditional ways to pay, i.e. cash and cards, what's the benefit of introducing a rival if it doesn't come with added value?
"What's needed is a solution that addresses the real and diverse needs of merchants and consumers. Yet another method of payment isn't enough unless it comes with add-ons such as data and loyalty scheme management for merchants, and a relevant, versatile and wider-reaching customer experience for consumers."
So, what are the real reasons for failure?
ZNAP believes that it's down to a focus primarily on payments instead of other areas of consumer's lifestyles. It's also an immensely fragmented market with payment schemes that can only really be used domestically and require multiple applications to reach out to both online and offline stores.
Mobile money also fails to really live up to the promise of replacing the wallet due to its failed functionality and truly limited scope. That scope is also focused on retailers instead of hitting many of the other channels consumers spend their money.
So is it all doom and gloom for the mobile payment/money world then?
Personally, I'd say no, but what do you think?