Image of someone making mobile payments using their phoneMobile payments in the US are enjoying strong double-digit growth.  Despite that pace, fewer than 20% of US smartphone users have made mobile payments using  mobile phone in the past 6 months according to eMarketer. Why haven’t mobile payments gone more mainstream? Experts suggest a number of reasons, but I see two particularly big ones that need to be overcome.

Lack of a compelling value proposition

Frankly, pulling out a piece of plastic and swiping or inserting it into a terminal isn’t exactly onerous, particularly with the updated terminals that are now processing chip based cards faster than when they were first issued.

New products gain awareness and usage when they serve an unmet need or do something better, faster, cheaper or in some fashion different than the status quo. Maybe I’ve missed it, but other than being kind of cool and a technology on the cutting edge, what is the compelling mobile payments value proposition?

Security concerns

Security may be more of a pressing concern to Baby Boomers and Gen Xers,  but when cyber security experts express concern over mobile payment security you can expect people to take note. According to ISACA, the global cyber security association and its 2015 Mobile Payment Security Study, nearly half of the 900 cyber security professionals surveyed said mobile payments aren’t secured. Only 23% said they believed mobile payments are successful at keeping personal information safe. And 87% said the number of mobile payment data breaches will increase in the near future. It’s almost enough to get me to start carrying cash again.

 James A. Martin  in CIO.com raises additional concerns such as a patchwork of merchant acceptance, inconsistent and occasionally a less than frictionless user experience, and slow evolution of infrastructure and it’s no wonder that mobile payments are still not widely used.

Changing consumer behavior is not easily done.  Media attention might get consumers to try your new product, but without a compelling value proposition repeat usage is going to be hard to achieve. Look no further than ApplePay as an example. Repeat usage of ApplePay from March 2015 through March 2016 has been in decline according to PYMNTS.com’s quarterly mobile wallet adaption study.

Mobile payments in the US won’t become the ubiquitous payment method that many project until the hurdles mentioned above are addressed. If you think otherwise, I’d love to hear from you.
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