UC Berkeley Report on Mobile Payments Discovers Highly Negative Consumer Attitudes

A recently published study from the UC Berkeley Law School about mobile payments and related issues finds some significant consumer resistance -- at least in the abstract. A survey discussed in the report found that "over three-quarters (74%) of Americans said that they are 'not at all likely' or 'not too likely' to adopt mobile payment systems. Just 24% say that they are likely to adopt mobile payments."

Enthusiasm or resistance to mobile payments varied by age. Interestingly the people most enthusiastic about the technology were those in the 35-44 age range -- not the youngest adults. Yet attitudes and behavior are often distinct and surveys don't always reflect what people actually do in concrete situations in the world. Still the data potentially reflect a stiff uphill climb for mobile payments purveyors. 

Services like Square and PayPal Here may be exceptions because they don't require a change in consumer behavior. The consumer is still swiping a card; it's the merchant experience which is changed. 

A 2012 consumer survey conducted by the US Federal Reserve found that 12% of respondents had made a “mobile payment” within the past year. However “payment” was broadly defined to include online bill paying, m-commerce, charitable giving and money transfers, among other transactions. Online bill paying was by far the most common “mobile payment” activity according to the survey.

(Source: US Federal Reserve Q1 2012, n=1,780 US adults)

Concerns over security and the lack of apparent/clear benefits were the top two obstacles to mobile payments adoption according to the Federal Reserve survey.

The UC Berkeley survey looked at related areas surrounding mobile payments adoption. It explored location tracking and other privacy related issues (i.e., giving merchants information as part of the mobile transaction). Among other things, the survey asked consumers about how much information they were willing to give to merchants and how comfortable they were allowing their movements in or around shopping areas to be tracked by retailers or other entities. 

The report says that, "Americans overwhelmingly oppose the revelation of contact information (phone number, email address, and home address) to merchants when making purchases with mobile payment systems. Furthermore, an even higher level of opposition exists to systems that track consumers’ movements through their mobile phones." An overwhelming 96% of survey respondents say they objected to having their movements tracked by merchants or retailers; and 79% said they would “definitely not allow” it, with the remaining 17% saying they would “probably not allow” it.

Again this may be an abstract fear that dissipates if consumers realize concrete benefits from permitting themselves to be tracked or by divulging information. Regardless, mobile payments vendors and merchants will need to overcome the catalog of user fears and offer very concrete benefits to drive adoption. There are a large number of people who not only don't see mobile payments inevitable, useful or convenient but see it as a net negative.

That perception will need to be overcome to mainstream the phenomenon. And that will probably happen by getting a sufficient early adopter critical mass of people who can then proselytize and educate their friends, family and colleagues.