2015 has seen the arrival of several major players to the mobile payment arena. This flood of new options has certainly had an impact on consumer awareness but has done little to increase adoption rates.
Who’s Using Them
A new report by Accenture indicates that in North America (the current mobile payments battleground) less than 20% of people are using mobile payments one time per week. The report, which is based on responses from 4,000 smartphone users across the United States and Canada, shows that while awareness of cell phone based payments rose by about 52% year on year, the growth of actual payments increased by just 1%.
The adoption driving the growth of mobile payments occurs mainly within high-income consumers with a household income of more than $150,000, followed by the millennial consumer base. Nearly 40% of high-income consumers said they make mobile payments weekly, while 23% of millennials reported the same.
How to Capture Consumer Interest
This latest data leaves companies like Apple, Google and Samsung asking a simple question; what will it take to finally lift mobile payments usage off the ground? A recent survey provides some clues with consumers expressing a demand for discount pricing and behaviour specific incentives when mobile payments are used.
Roughly 80% of consumers that have used mobile payments said they would increase usage if they were offered deals based on their shopping behaviour. At the same time 54% of consumers not currently using mobile payments said they would start if they were offered discount pricing or coupons.
The survey results also revealed the details of the evolving landscape and what platforms are pulling ahead. Just over one year after its initial release, Apple Pay has emerged as a clear front-runner accounting for over two-thirds (68%) of mobile transactions across the US.
What Does This Mean for the Middle East
Though the above data comes from a different region, it does give some indication of how mobile payments might progress here in the Middle East. With an expected 195 million smartphone users by 2018, high smartphone penetration across the region will bring mobile payments to a large audience quickly.
Smartphone users in the Middle East already use their devices for a range of shopping related tasks such as price comparison, product research, and retailer location, but it will be up to businesses to incentivise consumers and capitalize on the mobile payment trend. Entrepreneurs that listen to consumer pain points in the West and create successful solutions stand to gain the most from this innovative technology.
Ultimately, it will be the customers that determine the fate of this new payment method, but one thing’s for sure, 2016 will be a critical year in the Middle East for this developing technology.