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Mobile Payments Security – the Consumer View


by on December 20th, 2011

One of the fallouts from the much publicised Verizon/Google disagreement that we commented on last week was the renewed focus on the security of the mobile payments process.  This week there have been a number of reports on this issue.

There have been two technical views – one on the security of Google Wallet and the other from the GSMA on the secure element and SIM.  There have also been two (conflicting) consumer views which, in our opinion, are much more likely to influence the development of the market. The first was from the Consumers Union warning that “Consumer Protections Lacking For Mobile Payments Charged to Phone Accounts” and the second from a PaymentOne-commissioned report entitled “Four Times More Consumers Consider Mobile Payments Safer Than Credit Cards”.

Well, you can read the reports in detail and you’ll find it’s not quite as clear-cut as the eye-catching headlines suggest; nevertheless they illustrate the issue – are consumers more or less comfortable in paying using their mobile than paying online and/or with their credit cards?  The mobile payments market is very much in its infancy and still waiting for its “kick-start”. In Juniper Research we believe that NFC is the technology-enabler – however, it takes much more than smart technology for mass adoption; it has to solve a problem for the user in a way that is easier and safer than the alternatives. This is why we are expecting the mobile payments market to accelerate – it offers a much more intuitive and convenient payments experience for the consumer, and, in our opinion, actually increases the security of the transaction over that of the plastic card or the online channel.  The question is, what does the consumer feel about it – they don’t read all the reports we do, but we believe that as users commit more of their “life” activities to the mobile channel so payments will follow. The only thing that will damage the market is poor user experience (and that includes security) so the pioneers in this market have to get it right …

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