It is viewed as a fast, practical and convenient tool, which those who have already tried it would not want to do without. It is used mainly for payments of small amounts, even if distribution among merchants is still limited. And in the near future, consumers would like the use of mobile phones to be extended also to purchases of travel tickets and to host personal documents such as tax code and health insurance card, but also loyalty cards, discount vouchers and coupons. To sum up, mobile payment is rapidly entering our daily lives and is unanimously recognized as a payment system set to spread further.
These the findings of a recent SIA study - carried out by ISPO on a select group of testers and merchants who took part in mobile payment pilot projects - presented today during "SIA Expo 2013", the event dedicated to digital money and innovation.
The research study by SIA, which designed and created the first interoperable hub for payments by NFC mobile phone in Europe, to which a number of Italian banks and telecom operators have already subscribed, shows that this new method is appreciated by 94% of the testers with an average rating of 8 out of 10.
Also interesting is the average number of monthly transactions by mobile phone which is higher than that for cards (91% made between 4 and 10 payments over thirty days) and mainly relates to amounts below 25 euros, which thus do not require a PIN number (76% against 24% of purchases for higher amounts). Use is mainly at supermarkets or shopping malls (71%), followed by restaurants (44%), bars, newsstands and tobacconists (29%).
There is also a significant difference in terms of gender: if on one hand men tend to repeat the same purchases over and over ("on the home-work route, for a coffee, newspaper or snack"), on the other, women experiment much more with mobile payment ("for the family shopping, in malls, for household linen, at Ikea, at fast food outlets").
Buying behavior also has logical repercussions on spending margins. While men consider the tool suitable only for small purchases, women use it to pay considerably larger sums ("even for furniture"), following an initial period in which they use it for micro-payments.
This demonstrates that women have evolved in their use of the service, while men have limited themselves to more basic use: for the female target, payment via mobile phone has transformed over time and evolved with regard to type and amount of purchases.
The SIA survey highlights that the feature most appreciated about mobile payment is speed (indicated by 59% of testers), followed by the practicality/convenience of having a single tool (47%), but also the simplification due to the elimination of cash and cards (21%). 12% also point to user- friendliness, the fact that a PIN is not required for small amounts and the simplicity of the payment itself.
Practicality (77%), speed (75%) and convenience (73%) are also the three aspects which, according to testers, permit mobile payment to win the challenge with debit and credit cards.
If the effectiveness of the payment tool and NFC (Near Field Communication) technology is highly satisfactory, some areas of inefficiency still emerge, relating to the limited training and familiarity of merchants with mobile payment (56%), technical faults (32%) and the poor distribution of contactless POS terminals (29%).
Involving merchants and improving accessibility and acceptance thus represents the real challenge in the near future. A future in which testers imagine far more integrated and widespread use of mobile payment, for example in the area of public transport (88% indicate it as a "very useful" development applied to flight, train and subway tickets etc.) or in relation to personal documents such as tax code and health insurance card (76%), to replace company badges (76%) and even in relation to loyalty cards (73%).
The SIA study also looked at the experience of merchants identifying, on the basis of customer traffic and size of the point of sale, three different types of response:
1. "dissatisfied but forward-looking", in other words large chains not yet very happy with the spread of the technology but which see mobile payment as an interesting future business opportunity;
2. "dissatisfied", that is small organizations with few users, who do not yet consider mobile payment to be an interesting technology;
3. "satisfied", again small organizations but with a good number of users, who see mobile payment as a way to satisfy their clientele and win their loyalty.
Merchants identify three clear advantages in the new mobile payment technology. All feel that the merits of payments via mobile phone are for the most part related to consumer experience (convenience and speed as key factors), while the large organizations demonstrate that they have a wider vision which also includes the point of sale (security, the primary feature of virtual money compared to cash).
NFC technology can therefore certainly have benefits for both the clientele and the point of sale.
On the other hand, however, merchants point to a number of disadvantages such as poor distribution of the technology among customers, the general resistance of Italians to new technologies and the presumed difficulty of use for some classes of customers.
"The results of the experiments over the past year with various banks and Telcos confirm that mobile payments arouse great interest and can change behavior and habits - commented Massimo Arrighetti, CEO of SIA - The gradual process of eliminating cash is underway, also due to the new generations of users, and the mobile phone can certainly make an enormous contribution to the development of new payment methods and other services useful in our daily lives. However, it is necessary to create real situations in which to use them and to promote collaboration among all the players involved".