Mobile payment adoption slower than you think

Mobile payments are on a hot streak, but just how receptive are shoppers? New research indicates the market may be quite a bit smaller, at least at this early stage, than what mobile payment advocates would like it to be.

U.S. shoppers are no more interested in paying for purchases with a  smartphone than they were six months ago, when Apple (NASDAQ:AAPL) unveiled Apple Pay, according to a new poll from CreditCards.com.

In the survey, 1,000 U.S. adults were queried by phone during a period spanning March 5-8. Only 17 percent of survey respondents said they would pay for items using a cellphone "always" or "most of the time" if they could, compared to 13 percent in September 2014.

Apple Pay has experienced a good deal of early success, but the pool of users is relatively small. Only owners of the iPhone 6 and iPhone 6 Plus have Apple Pay, and not every retailer accepts the payment form, so it's not a huge surprise that interest is still low.

However, acceptance and use of Apple Pay is on the rise. In January, Apple Pay accounted for two-thirds of all mobile contactless payments on MasterCard, Visa and American Express networks, according to CreditCards.com.

Apple Pay is accepted at roughly 700,000 locations, according to Apple CEO Tim Cook, and the merchant count keeps climbing. Marriott this week said it would begin accepting Apple Pay at its 4,000 hotels. The hotel chain boasts one of the strongest loyalty programs in hospitality with a large base of frequent business travelers.

The launch of the Apple Watch will continue to expand that user base even as Samsung, PayPal and Google add payments of their own.

Researchers expect U.S. mobile payments to nearly triple in the next five years to $142 billion in 2019, according to Forrester Research. Mobile wallets will lead the way as the most popular method of mobile payment, compared to other forms such as peer-to-peer applications.

Peter Olynick, card and payments practice lead with Carlisle & Gallagher Consulting, told CreditCards.com that consumers are split nearly 50-50 between those who are interested in paying by smartphone and those who aren't, and that even split has remains steady for the past several years.

The one thing that has changed is that those who were open to the technology previously are actively using it now. "The folks who are interested are really starting to become power users, almost being addicted to using it," Olynick said.

Security concerns are front and center for shoppers and could be holding some back. Eight in 10 cited at least some concerns, according to new data from Walker Sands. Just 4 percent of consumers have used Apple Pay in the past year, but 18 percent said its introduction makes them more likely to make a purchase with their smartphone in the near future.

For more:
-See this CNN story
-See this CreditCards.com survey
-See this c/net story

Related stories:
Amazon pulls plug on Wallet
Samsung in negotiations to launch its own mobile payment system
Apple Pay's following grows heading into holiday season
Softcard partners with McDonalds, demonstrates mobile wallet's impact
Mobile Wallet Isis rebrands as Softcard
 

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