The mobile wallet: an end to flashing your cash?

Will the mobile wallet sound the death knell of cash? The latest research by YouGov shows almost one quarter (23%) of people are interested in using their mobile phone instead of cash to pay for purchases. YouGov analysts expect take up of this so-called “wave and pay” technology to be rapid.

This prediction is based on the findings that 10% are likely to use the service in the future. And while 5% agree that they will get the technology as soon as it's available, the vast majority - almost a half (48%) – won't be rushing to swap their real wallet for their mobile wallet. These respondents agreed it's a good idea but they will only consider mobile payments when any issues have been ironed out.

When it comes to awareness levels, more than a third (36%) of respondents admitted they didn't know if their existing phone was enabled to make cashless payments with a technology known as Near Field Communications (NFC). As Russell Feldman, the YouGov Consultant who led the research says: “Many consumers are attracted by the idea of paying for items via their mobile phone. Retailers, mobile operators and handset manufacturers have a real opportunity to educate consumers about the advantages of paying – particularly for smaller items – in this way. We believe once people have seen it in practice they will be quick to adopt it.”

The top perceived benefits for those planning to use NFC in the future are: convenience to pay (87%); the speed of paying (67%); easier than carrying cash and cards (67%); better for the environment (37%); less chance of losing personal information than with paper receipts (35%); being able to keep track of spending more easily (29%). (See Table)

Of those respondents that said they would be likely to adopt the cash-free payment technology for their mobile, they can see themselves buying everything from small purchases like sandwiches, magazines and newspapers (81%), to more expensive items such as CDs, DVDs and games (65%). More than a third (39%) could see themselves making bigger investments including games consoles, clothes and even the weekly shop.

There are concerns about mobile payment technology that could hold back mass consumer adoption. The main reason for respondents not planning to use mobile payment in the future is that they are happy with the way they pay now (67%). There are also concerns about security and fraud (56%), some respondents say they either don't need a mobile payment system or aren't interested (both at 45%). 44% are concerned about viruses or malware that could steal details from their phones.

Even those already planning to adopt the technology have concerns - security and fraud (79%) and viruses and malware (66%) are the top two worries for this group – suggesting that these early adopters are more technologically savvy than others in the survey.

As Feldman concludes: “There will always be consumer concerns about adopting any new technology, from data security to theft, changing mobile providers to correcting mistaken payments. Consumers need to see that these genuine worries have been addressed before they wholeheartedly embrace mobile payments. Our research suggests that consumers see using NFC technology as inevitable, and they are expecting supermarkets, mobile phone and consumer electronics retailers to be the first retailers to offer contactless payments.”