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Exposure To Mobile Payment Grows, But Concerns over Security and Lack Of Compelling Reason To Use Tool Are Roadblocks To Growth

Harris poll finds 53 percent saying they don't see any reason to switch from cash or payment cards
NEW YORK, Nov. 15, 2013 /PRNewswire/ -- Mobile transactions -- running the gamut of everything from having your payment card swiped through a smartphone attachment to using mobile apps to redeem offers to tapping your smartphone to a special in-store device to pay for an item -- are showing growth in the percentage of Americans who have experienced them firsthand. However, the segment -- particularly in its tap-to-pay application -- is still struggling to earn consumer interest.

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These are some of the results of The Harris Poll of 2,577 adults surveyed online between September 18 and 24, 2013 by Harris Interactive. (Full results, including data tables, available here)

'Tap-to-Pay' expectations mixed

Consistent with a 2012 Harris Poll, majorities of Americans appear to be anticipating tap-to-pay smartphone payments eventually replacing payment card

(64%) and cash (59%) transactions (72% and 66%, respectively, among smartphone

users) in the future - but not in the near future. Three in ten Americans (29%; 33% among smartphone users - down slightly from 32% and 38%, respectively, in

2012) believe such transactions will replace payment card transactions in less than five years, and one-fourth (26%; 29% among smartphone users - comparable to 26% and 31%, respectively, in 2012) believe it will replace cash transactions within that timeframe.

However, more smartphone users than in 2012 indicate that tap-to-pay transactions will never replace payment card (24% 2012, 28% 2013) or cash (30% 2012, 34% 2013) transactions.

Firsthand experiences on the rise...

Taking a step back, it's been an eventful year for exposure to the smartphone payment realm. Americans - smartphone users in particular - are more likely than in 2012 to have either personally completed or witnessed firsthand each of a series of mobile transaction types, including (but not limited to):

-- Paying for a product or service with a credit card and having your card

swiped through an attachment on the seller's smartphone, sometimes

referred to as "Mobile vendor" type transactions (Americans: 25% 2012,

32% 2013 / Smartphone users: 35% 2012, 43% 2013).

-- Processing a payment by tapping your smartphone against a special

receiver at a store or other merchant, instead of using cash or a

payment card (Americans: 13% 2012, 17% 2013 / Smartphone users: 18%

2012, 23% 2013).

..but interest declining for tap-to-pay

Looking at the consumer side of the equation, while tap-to-pay experiences may be on the rise, interest in using a smartphone to process in-person payments instead of cash or cards has dropped slightly since last year among Americans as a whole (27% 2012, 24% 2013) and more notably among smartphone users (44% 2012, 37% 2013).

-- Echo Boomers (35%) and Gen Xers (30%) display stronger interest in doing

so than Baby Boomers (16%) or Matures (12%).

Among those not interested in using a smartphone to process payments, a simple lack of compelling motivation remains one of the top factors impeding interest, with 53% saying they don't see any reason to switch from cash or payment cards.

This also holds true for smartphone users where a majority (58%) don't see any reason to switch from cash or payment cards either, although this perspective did decline a bit from 2012 (62%).

Security concerns are the other top impediment; 53% of those uninterested in using a smartphone to process in-person transactions also say they don't want to store sensitive information on their phone, while nearly half (47%, up from 40% in 2012) don't want to transmit sensitive information to the merchant's device.

Security concerns are also a worry among smartphone users, albeit with some changes since 2012:

-- Though over six in ten (62%) listed the fact that they don't want to

store sensitive information on their phone as a reason for lack of

interest, it's worth noting that this position softened from 68% in