Mobile Payments Expected to be 'Mainstream' Within Four Years
MOUNTAIN VIEW, Calif. -- A majority of executives believe the use of mobile phones and other mobile devices to make payments and conduct banking transactions will be widely accepted by consumers within four years, according to a global survey conducted by KPMG International, a network of firms providing audit, tax and advisory services.
The survey, which was filled out by almost 1,000 executives primarily in the financial services, technology, telecommunications and retail industries, found that 83 percent of respondents believe mobile payments will become mainstream within four years; 46 percent believe they will become mainstream in two years; and nine percent believe mobile payments are already mainstream.
"We believe that exploding smartphone growth and myriad opportunities will grow mobile payments at a much faster rate than our respondents anticipate," said Gary Matuszak, global chair of KPMG's technology, communication and entertainment practice. "A wide variety of payments is ready for adoption, as several key players already provide or are rolling out mobile payments; and interest among consumers in utilizing mobile payments is growing in line with the industry's readiness to deploy them."
Additionally, 72 percent of respondents believe mobile payments are now, or will be, reasonably important in the future. Specialist online systems continue to be in the leading position as a payment method, while m-banking and near field communication (NCF) are expected to gain significantly greater traction than today.
Fifty-eight percent of respondents stated they already have a mobile payments strategy in place.
A majority of the surveyed executives cited security and privacy as consumer concerns about using mobile devices, but they listed other attributes as more important features. Eighty percent named convenience/accessibility as the highest attribute; 73 percent cited simplicity/ease of use; 57 percent listed security; and 43 percent cited low cost.
According to the report, security is viewed as the main development challenge, followed by technology/adoption of the technology, and then privacy.
"The business leaders understand that when it comes to consumers choosing a provider based on security, reputation can make the difference, and any damage to a business' brand can prove costly, even to the extent of being a showstopper," said KPMG's Sanjaya Krishna, U.S. digital services leader in the TCE practice. "As a result, leading businesses are adopting multiple approaches to alleviate customers' privacy and security concerns."
In terms of who will be the leaders in the mobile payments market, survey respondents believe two groups of financial institutions will have the most-important roles: banks and credit card companies. Other key players cited include: specialist online payment players such as PayPal; online service providers such as Google and Amazon; retailers; and technology companies.
The fu;; results of the survey are reported in KPMG's "2011 Mobile Payments Outlook," available on the firm's website.