LAS VEGAS (5/7/14)--"There is high interest in mobile payments right now, but low activity," Jason Oxman, CEO of Electronics Transactions Association, told attendees at the Credit Union National Association Payments Roundtable Monday in Las Vegas.
Consumers love shopping electronically, and they love their smartphones, but the two interests have not converged into acceptance of mobile payments, Jason Oxman, CEO of Electronics Transactions Association, told the Credit Union National Association Payments Roundtable Monday in Las Vegas. (CUNA photo)
"About 70% of U.S. gross domestic product is attributed to consumer spending," Oxman said. "And 70% of consumer spending is being done electronically. There are one billion plastic cards in circulation in the U.S. today. Clearly, consumers love electronic payments. They also love mobile phones. There are 325 million mobile phone subscriptions in the U.S. and about 65% of those mobile phones are smartphones."
Oxman said, "If consumers love electronic payments, and if consumers love mobile phones, the logical conclusion is that there's high potential for acceptance of mobile payments."
That acceptance might not take place a quickly as some people think, he noted. About 90% of retail sales are at brick-and-mortar stores with 10% of retail sales online.
Consumer and retail acceptance of mobile payments will take some time, Oxman said. Acceptance of mobile payments has been growing at about 120% annually for the past five years, but it's still relatively low.
"Consumers need to be given an incentive to use mobile payments," Oxman said. "Surveys have shown that consumers actually think their credit and debit cards are more secure than their smartphones. It's not true, but that's what they think."
Incentives or rewards carry more sway than security when it comes to consumer adoption of mobile payments.
Frontrunners in mobile payment technology include Bluetooth low energy; near-field communication (NFC); or Europay-MasterCard-Visa (EMV) technology.
"It's estimated that one-third of all smartphones will be NFC-enabled by 2015," said Oxman. "The big question is whether or not the new iPhone will be NFC-enabled."