Internet experts bullish on mobile payments, research shows

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.

TOPICS: SMBs, Browser, Mobility

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

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  • Not for me

    As long as I have the plastic cards (credit & debit) I will not use a smartphone for that, these devices are too insecure, too easily broken or stolen.

    Not in my lifetime!
    • I agree!

      Whole heartedly.
  • Mobile Payments

    I am reading some of the consumer responses with a small degree of puzzlement. My assumption is that you currently buy things ONLINE. I remember the same cries when the Internet medium was building into an eCommerce powerhouse.

    I work in the consulting arena for many technology firms and recently started projects in mobile payments. While there have been breaches in card security, the impact to the end user has been nominal. There are cardholder agreements that outline a $50 charge but this has never been applied if there has been a breach and your own history of use indicates no fraudulent activity.

    Please be aware that everyone building solutions in this area are completely focused on security because card associations (Visa, Mastercard) etc. are not interested in having fraudulent charges made leaving them holding the bag on lost transactions.

    At a recent global conference called the Mobile World Congress, I met with many companies in the mobile payments sector, and SECURITY was top on their list. So while I can appreciate your concerns, the same concerns raised for online are recurring for mobile. :-) That's ok. However, Black Friday and Cyber Monday have shown that consumers "are comfortable" with online and many people are buying off their device too. Indications? iTunes from iPhone?

    One interesting company did catch my attention. Called Admeris (, it encrypts the consumer's smartphone information and credit card but stores the information off their device enabling a quick one-touch payment. The live demo was amazing. The device and CC were auto-identified and only the last four digits were displayed. The customer only had to enter their PIN CODE or a CVV code (back of your CC - which for all intents and purposes, you know based on the PLASTIC in your wallet) to buy a good from the merchant (online, digital order) from a smartphone browser (iPhone and Android). They claimed to support 1300 handsets (smartphone and non-smartphones) to enable secure, easy transactions from a device.

    In the final analysis, transaction convenience will become a hotbed of activity in the coming years. Specific use-cases that you/I have not even fully imagined will become so common-place that it will become the nomenclature of the current day. In 1999, Steve Job talked about 'file server sync' he did HIMSELF to keep files the same between different devices - he was talking 'iCloud'. Now everyone knows what a "CLOUD" is but a short while back, that was an image common to developer/infrastructure diagrams and now a visual cue for consumers.

    Go figure.