When will mobile phones become our mobile wallets?
Bratislava, 31st July 2012 – Almost one quarter of mobile phone owners in Slovakia would be interested in using contactless payments with their handset in the next 12 months, provided that their bank offered them this option for free and their handset enabled them to do so. Contactless payment is an alternative allowing customers to pay in shops and points of sale by mere application of their mobile phone instead of using a debit card where there is no PIN code necessary for payments under EUR 20. Although mobile payments are still in their infancy in Slovakia as well as abroad, they surely have great growth potential in the coming years when wallets and payment cards will be gradually replaced by mobile phones. However, consumers first have to buy in and be convinced about the security of such transactions. This information comes from the latest representative survey conducted by GfK Slovakia in May 2012 on a sample comprising 1000 respondents aged 15 to 79.
Men and people who are interested in technological novelties (early adopters) and therefore are owners of smartphones declare a much greater interest in contactless payment by mobile phones. The good news for banks is that usage of smartphones in Slovakia is on the rise and is linked to younger consumers with better income and higher-value customers who are more prone to accept innovative products and services. Also, as many as three quarters of Slovaks who have experience with some form of mobile banking (access to and communication with their account via their handset) would like to carry out standard purchases in shops with their mobiles.
What prevents a rise in mobile payments?
The Near Field Communications (NFC) technology that supports the possibility of small-distance payments via mobile devices has been around for several years already. However, one of the reasons why its introduction has been delayed globally is the large number of brands involved from a wide range of sectors and industries. All of them ask the key question: "Who should own the relationship with the customers themselves”?
Financial institutions, i.e. banks are motivated by the fact that mobile payments represent a step forward in the evolution of banking services. It could modernise their product offer and refresh their brand image. For mobile operators, the attractiveness of this growing sector lies in the opportunity to diversify the sources of their income – mobile payments offer a growth opportunity outside the traditional core business of voice, text and data services. And, finally, for producers and providers of smartphones (or their operation systems) mobile payment-related services represent an important new source of information linking online and offline purchasing behaviour – i.e. something that would further increase the value of their user ecosystems for advertisers.
Reaching an understanding among all stakeholders involved and more importantly, to agree who will own the relationship with the customer represents the key barrier for introducing mobile payments into the market in most countries.
The fight for electronic wallets
The International survey of GfK NOP conducted in 9 countries discovered that financial institutions (48%) enjoy the highest level of trust, consideration and, above all, consumer preferences among these three groups. Within this category, the highest level of trust, consideration and consumer preferences was measured for traditional brick-and-mortar banks. Consumers feel that they can rely on traditional banks when it comes to the safe processing of payments, management of personal finance and they perceive the move toward mobile payments as a natural next step.
Mobile and telecommunication brands register a considerably lower level of trust when it comes to the control of financial transactions (10 percent). Within this category of brands, mobile operators enjoy the highest levels of trust, consideration and consumer preferences although falling behind the financial institutions’ brands. The adoption score for network operators, providers of mobile devices and operating systems is, however, substantially higher among owners of smartphones, younger consumers and early adopters. These conclusions strongly suggest that the above-mentioned relationship with the customer cannot be owned by a single brand. In order to make mobile payments really work, the benefits of all stakeholders should be combined in a single integrated ecosystem that will comprise several strategic brands.
When it comes to mobile payments, trust and security is of prime importance among consumers. The capital that banks and financial institutions wield in this sphere cannot be underestimated. Customer satisfaction with banks is, despite the heavy global pressure on banks in recent years, almost unshaken. Clients are convinced that banks will take better care of their money than non-financial brands. However, mobile payments need to be first of all comfortable and convenient, so that they don’t cause long queues at the checkouts – e.g. when the customer would like to quickly pay for their newspaper or for a cup of take-away coffee on the way to or from work. At the same time, mobile payments should be integrated within a single ecosystem that would work in all countries and on all types of smartphones.
Everything isn’t as simple as it may seem
Banks are often perceived as institutions where the development of new technology is complicated and less flexible. Players from other sectors therefore believe that they may significantly invade their territory by providing an adequate answer to the poorer innovation ability of the banking sector while taking advantage of consumers’ affection to their smartphones. No wonder that mobile operators and producers are globally leading the race for electronic wallets.
An international survey conducted by GfK NOP, showed that at the specific brand level, the strongest among the tested names included PayPal, Nokia and Apple. These three examples of global bands show that while financial brands have already built a high level of trust, mobile brands such as Apple and Nokia as well as relatively new financial brands such as PayPal have the potential to quickly erode this seemingly comfortable position.
Ryan Garner, Director of GfK Technology comments: ”In order to create the type of mobile payments that will be sufficiently comfortable to be accepted and bought in by the consumers, it will be necessary to take advantage of the consumers’ trust in financial brands but also to entrench the service in the mobile sector. By exploiting all of these strengths, a solution providing a mobile payment option would quickly attract an increasing number of consumers and put an end to the delay in the recent years that resulted in the failure to introduce NFC services onto the market.”
You can find out more on the international survey conducted by GfK NOP if you click on the following link: http://www.gfknop.com/imperia/md/content/gfk_nop/newsandpressinformation/global_mobile_payments_report_110511_final.pdf
GfK in Slovakia
GfK Slovakia is a leading provider of market research and marketing consultancy in Slovakia. It has been providing its clients with premium services and high added value analyses for over 20 years. For more information, visit our website at www.gfk.sk.
About GfK
GfK is one of the world's largest research companies, with more than 11,000 experts working to discover new insights into the way people live, think and shop, in over 100 markets, every day. GfK is constantly
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