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Consumers Say Smartphone Payments Will Replace Cash and Cards, Study Finds

In a new poll by Harris Interactive the majority of consumers said they believe smartphones will become the preferred payment method for most transactions in the future.

The majority of American consumers see smartphone payments replacing cash, checks and cards for most purchases in the future, a recent poll by market research firm Harris Interactive suggests. The poll, conducted last month, found that more than six in ten consumers surveyed thought that smartphone payments would eventually become the preferred payment method for most transactions.

But most of those surveyed also said they believed that the shift towards smartphone payments would happen soon. Only 32% of people polled by Harris thought that smatphone payments would replace card payments in the next five years, and only 26% thought that cash would be replaced by smartphone payments in five years.

[See Related: Moving Forward Mobile Payments]

But a more worrying sign from the survey for supporters of smartphone payments was that few consumers indicated that they were "very" interested in swiping their smartphone for purchases. While 27% of all of those surveyed - and 44% of smartphone owners in the poll - said they were intrigued by the concept, those percentages fell to 8% and 16% when asked if they were "very" interested. Notably, interest from men was 10 percentage points higher (32 vs. 22) than interest from women. Interest from Generation Y and Generation X were also much higher (40% and 34%, respectively) than among Baby Boomers (18%) and Matures (7%).

The biggest concern among those who were not interested in paying with their phones was security. More than half (51%) of those surveyed said they didn't want to store sensitive information on their phone, and 40% said that they don't want to transmit sensitive information to a merchant's mobile device. The survey also a found a general sense of apathy about the shift, with 62% of the smartphone owners in the poll saying they felt indifferent about the change.

Some consumers in the poll said they would be more interested in smartphone payments through a digital wallet that stored everything they now keep in their physical wallet. Among those polled 30% said a digital wallet increase their interest, and 43% of the smartphone owners said the same. But those numbers dropped to 8% and 12%, respectively, wen asked if they'd be "much" more interested.

The Harris Interactive poll was conducted last month online and surveyed 2,383 adult consumers.

Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio

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KBurger
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KBurger,
User Rank: Strategist
12/12/2012 | 5:06:45 PM
re: Consumers Say Smartphone Payments Will Replace Cash and Cards, Study Finds
This kind of ambivalence suggests it must be very difficult for banks/FIs to anticipate what is right for their retail customers.
Greg MacSweeney
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Greg MacSweeney,
User Rank: Author
12/13/2012 | 4:41:02 PM
re: Consumers Say Smartphone Payments Will Replace Cash and Cards, Study Finds
If I could ditch my regular wallet for a smartphone/digital wallet, I would do it in a heartbeat. First, a digital wallet/smartphone is more secure than a regular wallet. If you lose it it has a passcode and can be wiped remotely. If you lose your regular wallet, good luck.

However, Apple's Passbook is a joke (there are like 15 companies participating in it). And Google Wallet intentionally excludes iOS devices.

So it looks like I'll continue to carry my regular old wallet for some time.
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