UK consumers 'fearful of mobile payments'

By UK CreditCards.com

Published: 20 October 2011

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Fears over security are putting consumers off the idea of using their mobile devices for payments, according to a new study.

Consumer research group Intersperience has warned that concerns over the recent phone hacking scandals that dominated UK headlines mean only 17% of people would be willing to use their mobiles as electronic 'wallets' connected to debit or credit cards in the future.

Security concerns remain over mobile payment systems
The company's Digital Selves unit surveyed 1,000 UK adults on their attitudes to mobile payment systems, learning that 44% are worried about a lack of security software for smartphones. Nearly a quarter (24%) also expressed the opinion that their mobile phone is more likely to be stolen than their wallet.

Intersperience highlighted these concerns just as a new mobile payment technology is being trialled in the US. Internet giant Google has launched the first phase of its mobile electronic wallet system in the country, something it is expected to do in the UK next year.

Technology companies working to create new levels of security
The Google Wallet system allows users of the new Android Nexus S 4G smartphone to make contactless payments at participating retailers. By tapping their phone on the corresponding terminals at checkouts, customers will be able to complete payments. The mobile payment wallet can be linked either to a Citi MasterCard or the Google Prepaid Card.

Google claims that the electronic wallet's security features actually go beyond what is possible with traditional wallets or debit and credit cards. Together with MasterCard PayPass, it has ensured that mobile devices secure all card details in an encrypted format on a chip called Secure Element that is separate from the rest of the phone's memory.

The company states: "The chip is designed to only allow trusted programs on the Secure Element itself to access the payment credentials stored therein." It also suggested that the Google Wallet PIN will protect payment card information if a phone is lost or stolen.

Despite these advances in security, Intersperience's report suggests that most British consumers still need convincing. 

"There is no doubt that the phone hacking scandals have unnerved consumers," said Paul Hudson, chief executive of Intersperience. "We also detected a marked rise in security concerns when people use devices with mobile internet access compared to fixed access via PCs. These beliefs will impact the pace at which UK consumers adopt mobile payment systems."

See related: Smartphones to get secure fingerprint technology; Credit card details found on old mobile phones