Are Mobile Payments stalling ?

Posted on December 7, 2015


and of course, will they take off again anytime soon.
Reports are coming on on the use of mobile payments over black , and the one everyone is quoting is InfoScout’s which shows that Apple Pay’s use on the day went down to half what it was last year, and was only used 2 in 100 purchases, where ApplePay was available.
Also, they quote a similar percentage for Android device based payments too.
For me there are a few parts to solving this riddle of why it’s dropping:
  – Firstly, and for the main part it’s about people’s ingrained behaviour when shopping at a till;
  – iPhones are kinda awkward to hold when using Apple Pay.
  – Are you sure you can use your mobile phone, the whole ubiquity issue (much like we still have for contactless card payments)
  – People are less trusting of using their mobile phone to pay for things … still.
The first part is quite simple really,  when the till operator tells you how much you need to pay,  or as is more common these days your self checkout machine asks for payment,  then you automatically reach for your wallet or purse.  For those of us that have been around for a while,  this is deeply ingrained behaviour.  Plastic cards have been in use for a long long time, we have learned to use and trust them.  So much so that I have often thought, as I am paying with my contactless card, that “I could have used my phone for that”.  So if someone like me who lives and breaths mobile does not remember, it will take a lot longer for a regular person to remember, in the 2 seconds they have to decide how to pay, to dig out their phone. I guess I am saying this could change over time,  but not without a lot of messaging to folks, such as Apple Pay stickers at tills/POS,  you need to catch them in the moment.
When using Apple Pay you need to get your phone out, open the wallet, potentially select the card, then you need to have your thumb on the sensor.  With the sensor at the bottom of the device lends itself to a less comfortable position, and honestly feels like you could drop your phone,  and for most people iPhones are precious cosseted things and this fear, whilst a small part of the equation does come into it..  If you use an Apple watch,  well most people are right handed, and so tend to wear their watch on the left wrist,  yet most till credit card systems are setup to be more right handed use,  as are ticket gates for transport so mean you have to reach over with your wrist.
Can you pay with your mobile phone,  it’s not always clear if the till or Point of Sale Terminal will accept your mobile phone as payment.  Until this is either very clearly signed, everywhere, or that such methods become ubiquitous this will always cause a drag on uptake, and will help slow the change of learned behaviour I talked about just now.
The last point is also an interesting one because the lack of trust in mobile for paying, in general, is both contentious and hard to change, and I think also contributes negatively to the rate at which people are taking up mobile payments.
So lets add some other data from IBM (my employer, but these are my views not theirs) which I interpret to back up this assertion.  I am referring to IBM’s Black Friday Report for 2015 which uses it’s Watson system to analyse the sales, traffic, and media to come up with online sales data.  See the chart below for online sales
Screen Shot 2015-12-07 at 13.53.27
Yes this is online,  not real world bricks and mortar shopping,  however if you look, 45% of shopping traffic os on mobile, nearly 60% if you include tablet, yet only 20% of sales are transacted on a mobile.  When I talk to retail clients, and indeed people I meet, I hear the same refrain,  that people will browse on their phone, may even drop things into a basket,  and then switch to their PC to pay.  This is a mix of convenience; because it can be awkward inputting all the card and address details on a phone; and of trust, people have more trust using their PC.
So all in all I guess I am saying that the transition to using Payments via mobile phone will be a far longer journey than men other transitions have been (I am thinking alarm clocks, torches, cameras etc).
In my opinion we are two or three years away from mass adoption being achieved.