Mobile payments brand preference
Last year GfK completed a piece of research “Mobile Payments : the importance of trust and familiarity and the need for cooperation”. It was written by Ryan Garner @RyanGarner.
It considered consumers trust, consideration and preference for adopting close proximity mobile payment services by evaluating which stakeholder groups and brands consumers were most likely to choose to enable these mobile payment services. I found the focus on the end consumer refreshing.
Not surprisingly, trust was the biggest driver of brand preference in the adoption of close proximity mobile payments services. From a sector perspective, financial institutions were perceived as the most suited to process payments and keep personal financial data safe and free from fraud. In developed countries these institutions have been trusted by consumers for hundreds of years to provide payment and banking services and even though the study was completed after the 2008 banking crisis it still appears that trust exists. Mobile payments services managed by financial institutions are a natural progression from the cards of today.
Preference for mobile operators, mobile handset manufacturers and mobile OS brands was significantly lower although the research did highlight strong brand preference for Nokia in China and Apple amongst I-phone users. In the mind of the consumer, mobile operators aren’t strongly perceived as brands that could provide robust, bank grade security for managing their mobile payments. In the UK, not all mobile operators are renowned for their service and customers show little loyalty back switching operators to get better deals. Customer churn is high compared to banks. Contrast this however with developing countries where with a less mature and trusted banking infrastructure, mobile operators are trusted and in some cases provide mobile phone based money transfer services eg m-pesa. The research also concluded that when mobile operators were partnered with financial institutions their trust and preference rating increased significantly.
As discussed in last week’s blog many stakeholders including banks, mobile operators, traditional card payment companies, online merchants, physical merchants, mobile handset and OS companies and more are working both together and independently to reap a share of the mobile payments market. Undoubtedly Apple’s recent announcement of its new Passbook app for iOS6 signals its intent for the new iPhone5 to be used as an electronic wallet.
The GfK research provides food for thought but as has been proven in the mobile sector over the years it’s the way that the business opportunities facilitated by “technology” are designed, delivered and communicated to end consumers rather than the technology per -se that will lead to business success. If we had asked early adopters back in the early 2000’s who they anticipated being the best brands to buy and experience rich mobile data services (music, video etc) from I expect the majority would have said either the mobile operators with their new mobile portals (eg Vodafone Live) and on-device portals or the coolest handset manufacturers of the day like Nokia, Sony Ericsson and Motorola. Not the likes of Apple, Youtube, Google, Facebook.
It will therefore be fascinating to see which brands in the next 5 years manage to establish the strongest relationships with end consumers and become the mobile payment equivalent of the brands above. Those brands who have particular appeal to particular segments will be winners. For example my teenagers use and trust Paypal for making payments more than they do a traditional bank or credit card company. This was echoed in the GfK research which noted “PayPal, whose experience in delivering remote mobile payment services to consumers places it in a strong position in both financial and mobile spheres. As a brand it boasts high levels of trust and consideration. But, most interestingly, it has the highest brand preference of all those tested in this research”. I think the likes of Apple whose users trust with their credit card details and payments will be powerful. Additionally for some of the older generation who are rapidly adopting smartphones I anticipate they will look to the familiar banks and credit card companies.
….and probably most exciting of all, just like what happened with mobile content, new entrants will power to the front and disrupt.
I look forward to your thoughts.