Why Aren’t You Paying With Your Phone Yet? Mobile Payments Security and Consumer Confidence


Industry analysts have been predicting the mobile takeover for over a decade, but time has consistently proven them too optimistic. Consumer adoption of mobile payments has been slow, to the surprise of many in the industry, and studies have pointed to one overwhelming reason why: security.

Most online shoppers avoid mobile payments because they don’t think of them as secure. In a survey released last week by Bizrate, over 60% of respondents believed that the security to protect their personal information while using their phones (both online and in-store) to make a purchase wasn’t strong enough.

But are mobile payments actually as dangerous as people think they are? Let’s take a look.

We wrote recently about the rise of the omni-channel consumer and how the retail industry is just beginning to experience the blurring of barriers between various sales channels (e-commerce, m-commerce, brick-and-mortar). One of the reasons why this didn’t start sooner and why it remains an ongoing process is that as much as shoppers want an omni-channel marketplace, many still perceive using their phone to make a purchase as unsafe.

A new survey from Tripwire asked consumers: “What is the safest way to pay for a purchase in a store?” A measly 1% of respondents chose mobile payments, while almost 30% of respondents chose credit cards, more than double the amount who chose debit cards. This survey shone the light on the public’s misconception about which method they feel is safest versus the industry’s knowledge that debit cards are safer than credit cards. So, is it possible that mobile payments are, in fact, more secure than consumers feel they are?

While consumers appear unanimous on the issue of security, researchers and analysts are conversely united. A report published by Kaspersky Laps suggests that at this point, mobile security is nothing to be worried about. Because online security and anti-fraud technologies had already matured before mobile payments arrived on the scene, banks, payment providers and retailers have been able to build a secure foundation into their mobile offerings, giving mobile payments a head start in protecting consumers.

A study from Javelin Strategy & Research, which predicts that value of mobile payments at the point-of-sale would grow to 5.4 billion USD by 2018, found that the mobile payment fraud rate of middle-market businesses is only 1% – that’s a considerable difference from the fraud rates of 52% for credit cards and 23% for debit cards. This suggests that payment cards are, in fact, the more dangerous choice.

The authors of Inside Revenue Management similarly agree that mobile payments may be more secure than the alternatives, writing: “From a security point of view, does it really make sense to carry on with little plastic cards, magnetic stripes and passwords?”

Should You Embrace Mobile Payments?

Despite mobile payment adoption having more than doubled last year, we’re still a long way away from leaving our wallets at home and using our phones to pay for anything we need or want. Mobile payment technologies are achieving a significant level of consumer acceptance, but many barriers to a truly mobile marketplace remain, from little annoyances such as small screen sizes to a lack of adequate infrastructure to allow merchants to reliably accept mobile payments.

If security is your concern, listen to the experts. While security risks will always be a reality, it’s likely that paying with your phone will prove to be more secure than paying with your credit or debit cards, with the right technologies in place to accept them.

While the majority of shoppers take a multi-device path to purchase, paying by phone still remains in the minority even though it’s the next logical step in today’s commerce ecosystem. Have you already embraced mobile payments? Tell us about it (or why you haven’t) in the comments!

Stay tuned to the DalPay Blog for more on this subject, with upcoming articles about the drivers and barriers of mobile payments and how to make your business mobile ready. For the latest news and views about the industry, follow us on Facebook and Twitter.

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Introducing Cross-Border Payments


Last October, the DalPay Blog officially went live. Since then we’ve been consistently delivering high quality content about DalPay, CCNow, and the current and future state of the online payments industry.

From the latest news and updates about the company to strategic advice on how to maximize sales and keep your website secure, we’re committed to providing you with only the most accurate and useful information that will help you achieve your personal and professional goals within e-commerce.

So that you can always find the information you need, we have broken down our blog content into a few different categories. Today, we’d like to introduce to you:

Cross-Border Payments

For over 10 years DalPay has been providing comprehensive payment processing services to online businesses in over a hundred markets worldwide, specializing in cross-border commerce. This blog provides us with an opportunity to share the expertise gathered from our experiences at the ground floor of this dynamic and innovative industry.

In our Cross-Border Payments category, our goal is tokeep you up to date on the latest news and developments in international commerce and how those developments may affect your current or future cross-border operations. For an example of the subjects we will be dealing with, take a look at our article “Multilateral Interchange Fee Caps will have a Mixed Effect in Europe” which details how new Value-Added Tax (VAT) regulations in the European Union will affect the cross-border sales of small and medium e-commerce enterprises.

Going ahead, we will be introducing the “Everything You Need to Know” series. In each article, we will focus on a specific country, detailing the e-commerce trends and market conditions in order to help you decide whether the market is a good fit for your business. Our next article will be “Everything You Need to Know about Selling in Germany”, where we will provide you with all the information you need to determine whether or not to expand your e-commerce operation to the German market.

Be sure to subscribe to the DalPay Blog for this and other articles in the series as they are released, and keep up to date with the latest posts by following us on Facebook and Twitter.

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