Internet experts bullish on mobile payments, research shows

Summary:Approximately two-thirds of experts tapped for a Pew/Elon University survey believe smartphones will be central to mobile transactions by 2020.

About two-thirds of payment technology and financial services experts believe mobile payments made by swiping a smartphone or other smart device will overshadow the use of cash and credit cards, according to a non-random survey conducted by the Pew Internet & American Life Project and the Imagining the Internet Center at Elon University.

Approximately 65 percent of the respondents to the survey agreed with the following statement:

By 2020, most people will have embraced and fully adopted the use of smart-device swiping for purchases they make, nearly eliminating the need for cash and credit cards. People will come to trust and rely on personal hardware and software for handling monetary transactions over the Internet and in stores. Cash and credit cards will have mostly disappeared from many of the transactions that occur in advanced countries."

Approximately 33 percent agreed with a virtually opposite statement, one that suggests security will raise too many concerns among consumers for them to feel comfortable with near-field communications. The technology in question would allow sometime to tap their phone or other smart device against a transaction system in order to make a payment. Another challenge for mobile payment infrastructure is the legacy approach, the respondents suggested.

The survey was randomly sent to 1,021 Internet experts, which is what makes the results non-random;  The complete results are published in a report called "The future of money: Smartphone swiping in the mobile age."

The report includes plenty of comments from the respondents, including this one from Jonathan Grudin, principal researcher at Microsoft, who is one of the people who thinks the 2020 timeframe is too early for mobile payments to really reach the tipping point.

Grudin told Pew:

"The driver here will virtually 100 percent be whether or not the credit card industry decides it can make more money through changing technologies. ... I think 2020 is too early for them to find ways to make this work better than the highly profitable money machine they have in place."

While I certainly agree the financial services industry will be a huge factor, I think that opinion overlooks the impact that small businesses and merchants could have. That is because for some of them, mobile payments offer a way to move to move to digital transactions much more cost-effectively than they have been able to manage.

Startups and digital payment innovators including Square and PayPal are having a huge impact on small businesses that have operated outside the traditional credit card systems for some time. Square hit the 1 million merchant milestone late last year, while PayPal has predicted it could process up to $7 billion in mobile payments this year.

Topics: SMBs, Browser, Mobility

About

Heather Clancy is an award-winning business journalist specializing in transformative technology and innovation. Her articles have appeared in Entrepreneur, Fortune Small Business, The International Herald Tribune and The New York Times. In a past corporate life, Heather was editor of Computer Reseller News. She started her journalism lif... Full Bio

zdnet_core.socialButton.googleLabel Contact Disclosure

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Related Stories

The best of ZDNet, delivered

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
Subscription failed.