When Will Mobile Payments Take Off?

In an article for Forbes, Token CEO Zohar Steinberg writes that mobile payments developers have failed to ask what consumers will get out of mobile payments. In order to see higher adoption rates, he argues, those working in the space will have to figure out how to improve the experience. Some figures emerging this year seem to substantiate Steinberg's theory.  For example, although Apple Pay registration is up 23% in 2016, many users only use it once, resulting in a 41% decline in eligible usage. Users gave the primary reason for this as they simply "forgot."

‍Others have argued that security concerns are the primary roadblock to greater mobile payments adoption.  With the growing implementation of EMV/chip-and-pin in the US, mobile payments technologies will have to ensure that their authentication mechanisms are comparably secure.

Although adoption rates remain low, forecasters are still predicting 210% growth in 2016.  The financial incentives for US retailers to adopt EMV may fuel some of this growth, simply by virtue of having NFC-capable tech in their stores.  On the consumer side, banks are getting more creative with their incentives, with Apple and Chase partnering last week to provide a free download of Eric Clapton's latest album when users add their eligible Chase cards to Apple Pay.  Similarly, Android has partnered with Coca Cola to offer points when users use Android Pay at vending machines, and Samsung has introduced loyalty programs in conjunction with its mobile payments service.Another indication that mobile payments are poised to take off is the entrance of a wider variety of tech companies into the game. For example, wearable tech FitBit recently announced that it was acquiring payments startup Coin, with an eye to compete in the space.

Further, adoption rates in other countries are substantially higher, suggesting that the West just needs to catch up. For example, New Zealand adoption is at 44% and China is at 30%.  Research suggests that these high adoption rates correlate with high levels of confidence in the security of mobile payments.  So, as innovations in take place security and consumer confidence rises, perhaps mobile payments are indeed poised for take-off.