PHILADELPHIA, PA: Mobile payments will be as unremarkable within ten years as credit card payments are today, according to two leading academics who warned retailers to heed the technology's increasing popularity among millennials.
Responding to the findings of a PwC study that suggested consumers were reluctant to store money in a mobile wallet because of concerns about security and privacy, Wharton marketing professor David Reibstein argued that this was simply another manifestation of people's "paranoia to things that are new".
Consumers were no longer worried about credit card companies knowing what they were buying for example. Similarly, restricting liability to $50 in the event of fraud had alleviated security worries.
"It's just a matter of people making an adjustment," Reibstein said. "I think 10 years from now, we'll look back at it and say, 'Hasn't this always been here?'"
His colleague John Zhang highlighted the take-up of mobile payment technology by millennials, who are using mobile wallets to transfer funds between friends and to store tickets for events.
"In fact, you can combine mobile payments with social networks," he said, with apps such as Venmo enabling peer-to-peer transfers – ideal for splitting the check in restaurants, for example.
For a demographic that has grown up with social media, this is quite natural behaviour. Bloomberg even remarked on how, among the younger age group, Venmo was on the way to becoming a verb – 'venmo me' – in the same way that people talk of 'googling' or 'tweeting'.
While consumers generally have been slow to adopt the mobile wallet – partly because of engrained habits, partly because of the confusion of proprietary technologies available and partly because of security – consulting firm Accenture said that it could "mend the seams of consumers' disjointed omni-channel experiences".
And with millennials already embracing the technology, the only choice retailers face is effectively one of timing – when do they step up to the plate and offer the service.
As Zhang pointed out: "If you don't [accept mobile payments], you're going to be passé. You're going to lose lots of your [future] customers."
Data sourced from Knowledgte@Wharton, Bloomberg, Accenture; additional content by Warc staff