Page 12 - Advanced_Payments_Report_2014

ADVANCED PAYMENTS REPORT 2014 – SPONSORED BY

5. The challenges

The harshest criticism from mobile payments is increasingly connected and mobile, ignore the inevitability of
detractors can be summed up in two statements: it mobile payments? Can a retailer ignore the need to optimise their
website for mobile devices?
has no business case and no one needs it...
No One Needs It
Our survey respondents, as shown in the chart below, identifed these Changing consumer habits is one of the hardest things to
two challenges plus increased security concerns as the top three accomplish. Survey respondents ranked the ability of mobile
challenges that must be addressed for mobile payments to be successful. payments to meet a consumer need as one of the top hurdles

for success. To be successful, mobile payments must solve a
The Business Model
problem that consumers do not perceive that they have without
As in the past, survey respondents indicated that creating a complicating the process with additional steps.
viable business model is a key hurdle for mobile payments. And
For most consumers, plastic cards work just fne. In order to get
understandably so. New payment services require infrastructure,
those consumers to change their habits, mobile payments services
marketing initiatives and incentive programmes to ensure that
must provide services that are easy to use and that enhance the
consumers understand the benefts. Providers must continuously
consumer’s current shopping experience. Additionally, these services
fne tune their services in accordance with consumer needs. But all
must provide value to merchants so that they will accept the payment
these challenges translate to increased cost burden.
method. To address these issues, service providers are bundling value
A variety of forces are putting pressure on already thin proft added services and developing streamlined check out processes that
margins for payment transactions. But this perspective ignores the enhance the user experience.
broader strategic questions. Can a payment provider, in a world that
Security

Key hurdles to the development of mobile payment solutions This year, concerns around security of mobile
payments have moved up in the priority list.
(% of respondents who agree or strongly agree)
Security is discussed elsewhere in this report.
Proftable business model 80% It remains an integral part of any fnancial
Security and increased fraud risks 77% transaction – especially payments.
Value proposition not adapated to consumer needs 76%
Confusion due to the large quantity of mobile payment Too Many Players –
methods 76%
Partnerships with other stakeholders (e.g. banks, Too Little Value
retailers) 72%
Development of an acceptance network 71% Another challenge is the plethora of providers
Diferent technology standards ofering mobile payments. This is a typical
70%
Lack of interest from merchants 55% early stage market phenomenon.
Relevant marketing ofers to consumers 55% People look for trends and roll out products
Lack of consumer demand
54% quickly when they see an opportunity, though
52% the market for their products may still be in its
0%
20%
40% infancy.
60%
80%
100%
Some products are instrumental in pushing

12 www.edgardunn.com | www.paymentscardsandmobile.com Edgar, Dunn & Company in association with Payments Cards and Mobile