Consumers Want Just One Account for NFC Payments, Survey Says

Many consumers seem willing to use their cell phones or other mobile devices for in-store payments, but the majority wants to have only one credit or debit card account enabled for wireless payments, according to new findings from New York City-based technology research firm ABI Research. The preference for just one mobile-payment-enabled card stood out in results from the mid-November survey of more than 1,000 U.S. consumers, according to principal analyst Jonathan Collins. Such cards would be capable of handling transactions from devices empowered with near-field communication (NFC) technology. NFC enables handsets and payment terminals to exchange data with each other at short distances. Separately, ABI on Thursday cut its current estimate and forecast for shipments of NFC phones, citing “difficulties in bringing the technology to the consumer market.” The firm now says 650,000 NFC handsets shipped worldwide last year, down from a previous estimate of 1.1 million. For 2008, it says 6.52 million will ship, a 10-fold increase but substantially fewer than the previous forecast of 9.81 million. “Given the strength and interest among carriers around the world for NFC, our long-term forecasts remain unchanged,” says Collins in a statement. The preferences of respondents to ABI's survey apparently stem from a desire to minimize the potential problems that could arise from using a new technology, at least in the early going. “It's really about just management, personal management of a new payment account,” Collins tells Digital Transactions News. “There are concerns that ranked quite strongly around security.” In fact, on a scale of one to five, security came out with an average of score of 4.5 in a cross-section of respondents sorted into five age groups and five income groups, according to Collins. Consumers also had questions about fees. In mobile payments, these could come from financial institutions as well as telecommunications providers in the form of a charge for data traffic, similar to the way text messaging is priced. “There clearly is a price point at which people will not find it [mobile payments] a valuable tool,” says Collins, who works out of ABI's London office. ABI's survey results come at a time when many banks are testing mobile payments and vendors are rolling out mobile-payment platforms (Digital Transactions News, Oct. 19, 2007). But many issues still divide the financial community from telecom companies in mobile payments, notably control of data and how the phone companies will make money on payment services. Collins doesn't claim to know which companies will be winners as the market develops, but says smart companies will listen to the clues potential mobile-payments users give. “NFC has been tested for some time,” says Collins. “The more [providers] interact with each other and determine how they will split revenues … and the more they listen to feedback from the trials, the better position they'll be in.” ABI surveyed consumers ages 14 to 59 who have Internet access and mobile devices. The margin of error on its results was not immediately available.