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Mobile payments more trusted than credit cards: study

December 14, 2011

Four in one consumers believe that mobile payments made through a carrier are safer than online credit cards, according to a study from PaymentOne and Javelin Strategy.

The study compared the online habits of credit card users to the mobile spending habits. The research also indicates that consumers are becoming wary of using their credit cards online.

“The most visible change is that there are more and more online merchants accepting mobile payments to the point that it has become fairly commonplace for online purchases, particularly for social networking and online gaming,” said Brad Singer, executive vice president of PaymentOne, San Jose, CA.

“But more significantly, just as people are more aware of mobile payment options, they’re also aware of the increased security risks that involve credit cards and personal financial information,” he said.

“2011 has seen a number of high-profile cases where hackers stole credit card data, passwords and other personal information.”

Carrier net
The research was conducted between September and December and sampled 2,000 consumers in the United States.

Ninety-five percent of users surveyed had a mobile phone, and 36 percent of them have used their devices to make a purchase.

The PaymentOne study found that 300 percent of respondents were more willing to trust a carrier-backed mobile transaction than one where users had to input their credit card information manually.

58 percent of consumers chose a wireless bill as their preferred way of making payments.

Similarly, 22 percent of consumers said that they would pick a landline or broadband bill as the way to make a payment.

Consumers with the greatest intent for making mobile payments raked in

25 percent of users who have used mobile payments bought digital entertainment, apparel or a travel item. One in three of consumers who used mobile payments used them to buy tickets.

79 percent of respondents surveyed said they would be more willing to purchase more online if they felt it was safer.

Safety concerns
The study also looked at why consumers may be uncomfortable giving out their payment information.

Thirty-two percent of consumers are afraid that their information will be caught by a third party when entering their credit card information via mobile.

Fifty-one percent of consumers are worried that their information will be accessed by unauthorized parties if it is stored.

Similarly, 54 percent of users are afraid that their information will be sold to other merchants.

Thirty-eight percent of users surveyed said that they do not like the idea of giving information online to parties.

The PaymentOne study is interesting because it is proof that consumers are comfortable making mobile payments if they are done in a secure way.

According to Paypal, global mobile payment increased 516 percent on Black Friday from 2010 to 2011, showing how consumers are more willing to pay for things via mobile (see story).

However, consumers are still not 100 percent comfortable using mobile for payment for security issues.

Carriers could solve that issue. With a reputable company backing their payments, consumers know exactly how they are getting charged and where their information is going.

“As soon as next year, we will see a lot more digital merchants offering mobile payments and charge-it-to-my-account options,” Mr. Singer said.

“As consumer demand for mobile payment options increase, carrier fees to add charges to mobile phone bills will continue to decrease and carriers will continue to be more aggressive to get a piece of digital commerce,” he said.

Final Take
Lauren Johnson is editorial assistant on Mobile Commerce Daily, New York

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