The security of mobile payments is the primary barrier that prevents consumers from adopting mobile payments, according to recent UK research conducted by the Auriemma Consulting Group (ACG). Improving the perceived security of both smartphones and mobile payments devices is essential to increase consumer adoption levels.

When consumers activate mobile apps or payments processes for the first time, they feel most secure when required to enter a username, password and either an authentication code from a card reader (rated 5.6 for perceived security out of 10) or email verification code (rated 5.2 for perceived security out of 10). Consumers are most comfortable with activation processes that are similar to what they use today for card based processes. Conversely, consumers are least comfortable when only required to enter a username and password (rated 4.7 out of 10).

When consumers check out via mobile payments, they feel most secure using an existing username and password, along with either a PIN (rated 5.3 for perceived security out of 10) or memorable word (rated 5.2 out of 10) unique to the app. Consumers prefer to have an additional layer of security specific to the app, over purely entering their existing username and password (rated 4.6 for perceived security out of 10).

35% of consumers would also be interested in customising their mobile security based on the amount of the purchase. If this was available, 50% of the consumers interested in customisable security would be more likely to make mobile payments. These consumers would expect and welcome additional security for larger purchases, which would both lower mobile fraud, and also help overcome consumers concerns about the security of mobile payments.

According to Matt Simester, Managing Director of ACG, ‘this research highlights that the barrier to mobile payments adoption is not necessarily technology or user experience, it’s about creating the right marketing messages to reassure consumers that this is a safe transaction channel. If mobile payments stakeholders truly want to increase the use of mobile payments they need to create segmented strategies based on sales ticket size and customer preference. They should also learn from existing card based processes which customers are already aware of and try to improve them - ultimately industry stakeholders will need to adopt more of the fraud risk themselves to increase the adoption of mobile payments.’

About The Mobile Payments Report

The Mobile Payments Report (MPR) is a market research service that provides a comprehensive and trended insight on all aspects of mobile and e-commerce, including contactless and NFC payments. The MPR tracks consumer usage, penetration, and attitudes across more than 50 key measures on a quarterly basis, and is therefore a source of deep consumer-led insight. The service is enhanced by consulting support from payments industry practitioners to enable subscribers to shape, adapt, and prioritise mobile payments strategy based on evolving consumer needs and mindsets. For additional information about this press release, and/or to subscribe to the Mobile Payments Report, contact Matt Simester at matt.simester@acg.net or +44 (0) 207 629 0075.

About Auriemma Consulting Group

Since 1984, ACG has offered comprehensive management consulting, research, industry roundtable and benchmarking services to the financial services industry. ACG clients include credit card issuers and networks, commercial banks, mortgage lenders, merchants, and industry vendors. With offices in New York and London, ACG offers actionable solutions to help clients make important business decisions to maximise their efficiencies and revenues.