Dec. 13, 2018 | by David Jones
As mobile wallet and contactless payment demand surges in parts of Europe, Southeast Asia, Africa and Latin America, questions remain about why the U.S. market trails other countries in adoption rates.
New research from the National Retail Federation and others is demonstrating that consumer and retail adoption of mobile payment technologies has been sluggish in the U.S., as consumers have balked at switching over to new contactless payment platforms.
"Our study found that consumer demand for mobile payment just hadn't materialized for most merchants and only about half had adopted the technology to accept mobile payment," said J. Craig Shearman, vice president for global affairs and public relations at the National Retail Federation, in an email interview with Mobile Payments Today.
He said the study showed 55 percent of merchants were set up for Samsung Pay, with 43 percent set up for Apple Pay and 20 percent with Google Pay.
The biennial report by the NRF and Forrester Research revealed retailers have tempered their enthusiasm about mobile payments implementation. According to the report, 35 percent of retailers said implementing new and emerging digital and mobile payment types was their top overall payment initiative over the next 18 months, which less than half the response from a similar survey in 2016.
The study showed consumer demand for these initiatives hasn’t materialized the way it was expected.
According to the report, PayPal leads with the most implementations online as well as the most retailers planning to implement in 2018 and 2019. Apple Pay is also among the leaders in the study.
Payment leaders, according to the study, have shifted their focus largely to improve the retail customer experience, with emphasis on supporting the buy online, pick up in store movement.
Sluggish sales
The demand concerns coincide with what some experts have previously warned regarding an industrywide slowdown in mobile device adoption, particularly in the high-end category. The slowdown issue reached critical mass in recent months when Apple stopped reporting its iPhone sales in quarterly earnings reports, a move related to that company's shift toward services revenue.
Despite that internal strategy shift, many investors grew alarmed by the move as the iPhone has been the core product for Apple revenue growth over the past decade.
While industry analysts said the mobile device slowdown is real, Rivka Gerwitz Little, research director, worldwide payment strategies at IDC, cautioned the trend does not correlate to the slow adoption of mobile payment use in the U.S.
"I don't think the slowdown in device sales will impact mobile payments," she told Mobile Payments Today in an email interview. "The fact that we had 90 percent plus smartphone penetration in the U.S., and had relatively tepid mobile wallet adoption, tells me there's little correlation between mobile device sales and mobile payments use."
She argued in-store contactless is "not enough of a value add" for consumers or merchants and expects to see a rise of universal wallet with in-store/online payment, one-click payment options as it is fleshed out with remittance and peer-to-peer lending capabilities.
Cover photo: iStock
Topics: Contactless / NFC, Mobile Apps, Mobile/Digital Wallet, Mobile Payments, POS, Retail, Trends / Statistics
David Jones
David Jones is a veteran business and technology journalist, with three decades of experience writing about business travel, real estate and technology.
Since 2015 he covered a range of technology stories for the ECT News Network, which includes the E-Commerce Times, TechNewsWorld, LinuxInsider and CRM Buyer, writing about cybersecurity, artificial intelligence, machine learning, open source computing and privacy issues among others,. He recently covered FinTech issues for PYMNTS.com.
He worked as a staff writer for Bloomberg Business News and an online reporter for Crain’s New York Business. He has written for numerous media organizations, including Reuters, The New York Times, The Real Deal, Continental, City Limits and The Nation.
He was previously awarded the George Washington Williams Fellowship for Journalists of Color by the Independent Press Association.
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