While More Consumers Will Use Smartphones For Holiday Purchases

By Christine Kern, contributing writer

Research reveals biggest barriers to mass adoption of mobile payment services.

Over 17 percent more consumers are planning to take the mobile payments leap this Holiday season to use their smartphones to make in-store purchases, according to INSIDE Secure research, a leader in embedded security solutions for mobile and connected devices.  Despite the increased use, however, identity theft, payment fraud and data privacy concerns remain the chief barriers to mass adoption of mobile payment services.

The Research Now survey evaluated the mobile payment preferences of 1,217 U.S. consumers.

“It’s exciting to see the evolution of in-store mobile payments from last year to this year,” said David Monahan, Research Director of Enterprise Management Associates.  “However, for mobile payments to make the leap to full-scale adoption, the industry must create the consumer confidence that the technology is more secure than traditional card-based payments having the security to prevent identity theft and privacy compromise they have been experiencing.”

According to the study:

• Thirty-nine percent of respondents plan to make holiday in-store purchases using a mobile device, up from 33 percent last year.
• Seventeen percent of respondents who did not use smartphones last year plan to make the leap to mobile payments this holiday season.
• More men (53 percent) than women (47 percent) plan to use mobile payments.
• Mobile payments are most popular with individuals between 18 and 44 years of age (64 percent), compared to 36 percent of consumers over the age of 45.
• iOS users (46 percent) are more likely than Android users (26 percent) to use mobile payments services at the POS this holiday shopping season.

The greatest barriers to mobile adoption remain fraud and privacy concerns, with 70 percent of those who are not planning to use their smartphones for in-store holiday purchases citing concerns about identity theft as a major deterrent. And 70 percent also said that concerns about mobile payment fraud keep them from using in-store mobile payment apps, and 71 percent stating that they are concerned about the privacy of their transaction data.

The study also found that banks may have the advantage when it comes to mobile payments, with 51 percent of mobile payment holiday shoppers reporting that they would prefer to use an app from their bank over third-party services like Apple Pay, Android Pay, or Samsung Pay.

See the infographic here.