WASHINGTON – New research from the Aite Group suggests that, despite lots of hype from service providers, adoption of mobile payment technology is off to a slow start.
For instance, of all the point-of-sale transactions recorded in the U.S. this year, Apple Pay transactions accounted for just 1%. Many industry watchers said security concerns are the primary hold-up for widespread use of mobile payment.
However, the news is not all bad. The U.S. Federal Reserve released its report on Consumers and Mobile Financial Services this year. The report indicates that 22% of those surveyed used mobile payment in some way, including online shopping. More specific data found that 39% of those who used their phone for mobile payments used their device at the point of sale.
The numbers for Apple Pay, Google Wallet and Android Pay are all low, but Aite Analyst Thad Peterson told the press, “It’s going to grow reasonably slowly for the next three to five years,” followed by a surge in demand.
U.S. financial regulators are already bracing for how the nation will change its spending habits. The Federal Reserve concluded in its report, “As smartphones become more common and more versatile, they can play an increasingly large role in the interactions between consumers and financial service providers, retailers, and other businesses.”
The Federal Deposit Insurance Corp., which insures all bank accounts up to $250,000, announced back in April that it will insure Google Wallet the same as any other account. Apple, meanwhile, is offering new deals to help make its Apple Pay more widespread. Discover and Apple have teamed up to provided double cash back to Discover customers who use their cards through Apple Pay before the end of this year.
Apple noted in a statement, “We’re off to a great start and we are seeing continued, double-digit monthly growth in Apple Pay transactions since launched, and our customers love Apple Pay – a recent survey found satisfaction rates of 98%. Merchants love it, too, and tell us that the added security and convenience Apple Pay brings their customers is a huge benefit.”