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Mobile Payments May Not Be The Revolution In America

Mobile payments technology – apps like Apple Pay, Samsung Pay, phone-based wallets, and individual retailer cash apps – have been hailed as the wave of the future by economists – but for Americans, it seems unlikely that the mobile payment revolution will happen anytime soon. Compared to the rest of the world, very few Americans even use mobile payment services, totaling only a quarter. In China, that number is almost doubled – but it can be hard to discern why. Americans appear reluctant to engage with retailer-provided mobile payments unless they offer a loyalty program, for example. The problem may go even deeper than that, though: older consumers mistrust mobile payments, and younger consumers can find themselves led to financial mismanagement by the ease of payments.

Millennials And Generation Z Are Prone To Mobile-Prompted Financial Mismanagement

For millennials and Generation Z – digital natives, unlike their parents – mobile payments technologies as well as online payments are a fact of life. Unfortunately, while it’s easier than ever to move money, millennials and Gen Z need assistance with the basics of financial management. Although younger consumers are literate in technology, they’re less likely than their parents to be literate in finance. With the ease of mobile payments, younger consumers can find themselves in debt at the click of a button. For that reason, parents of Gen Z may be reluctant to allow their children access to mobile payments, and millennials who have been burned before can be unwilling to re-engage.

Consumers Have Doubts About The Security Of Mobile Payments

Although not the majority, some Americans do use mobile payments – but for the most part, American consumers use them for low cash-value purchases rather than higher ones, and only use them when they feel pressure to pay quickly. Consumers value technology that allows them to avoid counting loose change, but surveys show that they have worries about the security and efficacy of mobile payments. Major consumer anxieties include transaction errors in the mobile platform, unauthorized use concerns, undocumented or vaguely documented transactions, device reliability, and of course, privacy. These concerns haven’t abated over time as more payment apps have developed, and the average American consumer is still very wary of mobile payments.

Can Consumers Be Convinced?

When Apple first released Apple Pay, the public discussion about it largely centered on security concerns. After three years, consumer worries remain about security in mobile payments – but it’s not impossible to convince them. As more retailers accept mobile payments and develop their own apps, more American consumers are finding themselves swayed to the mobile payment space, and its ease of use is a big plus for mobile payment providers. But that change won’t happen overnight – it seems like consumers are going to be wary about if and when they accept mobile payments for a long time to come.

While Americans aren’t necessarily anti-mobile payment, they’re much more reticent than other areas of the world to embrace the relatively new space. Concerns about security and financial management understandably dominate public discourse. Although Americans are slowly starting to use more mobile payments, it seems unlikely that we’ll see a mobile payment revolution this decade.

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