Cash and credit and debit cards are certainly dominant in the payment space today. Some think change will never happen, but they are dead wrong. Mobile payment is in its infancy, but the benefits are clear: simplicity, convenience, relevance, and targeted offers and rewards. No more wallets with multiple cards, just one device. And this is only the beginning.
Consumers and retailers are eager to participate. Starbucks – a market leader – already offers a popular payment app. It has now moved further into mobile payments by partnering with Square to allow mobile payment at all of its 7,000 U.S. stores. Customers may soon even be able to pay with their phones while they’re still in their pockets. With Square, a cashier can see your photo as you approach the register, and you complete the purchase by stating your name.
As the mechanic in the video says, “If it’s good enough for Starbucks, it’s good enough for me.”
But, for most consumers, it’s not that easy. A recent survey found that 42% of mobile phone users who could use mobile payments have chosen not to because of the fear of fraud. Consumers fear that their privacy and security could be jeopardized by using mobile payment options.
Concerns over privacy in the mobile space may hinder its potential for growth – at least in the short-term.
In April, the FTC held a workshop on mobile payment technologies to review the privacy, security, and legal concerns. And there is good news – the FTC is not inclined at this time to regulate the industry. It wants to see best practices that will help ensure that the systems are safe and secure. Everyone at the workshop agreed that education was a critical element to the future success of mobile payments. In fact, education may almost be as important as the technology.
Self-regulation is alive and well in the mobile app space. Admittedly, uniform privacy standards are still a work in progress. The considerable attention on mobile and mobile app privacy practices over the past year should come as no surprise. This is simply another part of the intense effort to bring greater transparency and uniform standards to online consumer data collection practices.