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The race is on for market share in the mobile payments space.
Although the concept of mobile payments has been around for a while, most consumers are just warming up to the idea – meaning the majority of customer loyalty is still up for grabs.
Close competitors in the tech space, Google and Apple continue to deliver: Google and Apple with Google-powered Android phones versus the iPhone; Google Play versus iTunes; Chromecast versus Apple TV; and now the potential for smart cars from both innovators. But will either lead the mobile payments space?
Surprisingly, neither is currently a big contender in the mobile payments arena, both with products available.
The recently released Walker Sands' 2015 Future of Retail Study reveals barriers and potential solutions facing mobile payment providers, such as Apple and Google, among others, as well as for retailers looking to move their customers to digital currencies.
Consumers base much of their buying decisions on trust, but the study reveals eight out of 10 consumers reporting some hesitancy about using mobile payment services, with the biggest concerns being security (57 percent) and privacy (48 percent). The study also found that consumers continue to view cash as the most secure form of payment (56 percent), ahead of credit cards (22 percent) and debit cards (16 percent), with mobile wallet/phone applications named by a mere one percent of consumers.
Slow, but still moving, the shift to mobile payments has steadily climbed over the past year, and much of that may have to do with Apple Pay effectively raising awareness among both consumers and retailers and increasing consumer willingness to use smartphones to transfer money virtually. According to the study, 40 percent of consumers have used a mobile payment application in the past year, up from just eight percent in 2013.
Thirty-six percent of Apple users said the introduction of Apple Pay makes them more likely to make a purchase on their phone in the near future, compared to 18 percent of all phone users who were more likely to do so. Even Google-powered Android owners (eight percent) and Windows phone owners (16 percent) say the introduction of Apple Pay makes them more inclined to purchase on their phone soon, clearly demonstrating the strong influence Apple has over not just its own market, but all markets in its industry.
But GoogleWallet can’t yet be discounted so easily – it’s already been used by 18 percent of those surveyed, compared to four percent who said they had used Apple Pay in the past year. While it seems Apple Pay has opened the flood gates for many consumers, only time will tell if it can speed ahead of Google soon.
Long-term, however, once one tipping point has been reached in the process of early adoption of mobile payments, the majority will likely have found confidence in the mobile payment business to securely transfer their money, having had time to witness its success.
With trust issues no longer a factor, the Apple versus Google playing field should even out, and it will be interesting to see if there’s a line divided based on mobile device preference – iPhone versus Android users, or if another player comes into view.
Now let the games begin.