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Mobile Payment Adoption

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I had an interesting conversation with a friend of mine who works for one of the big UK banks. He'd just been at a presentation regarding the progress rolling out mobile payments in the UK.

Key points:

  • Mobile payments adoption is lagging way behind contactless card payments although UK has widest adoption in western world.
  • Contactless card usage is over 50% of eligible payments (under £30) and rising.
  • Of these 16% are from mobile devices (up from 8.5% previous year)
  • Apple Pay is on the highest number of devices followed by Android/Google Pay then Samsung Pay.
  • There is consumer confusion between the various Android services (Android/Google/Samsung Pay).
  • Apple pay has a much higher number of transactions and a much higher average transaction value (Apple Pay can be used for transactions over £30)
  • Adoption on transport services such as London Tube is increasing but not as fast as anticipated. Surveys suggested security concerns over taking phone out at turnstiles, embarrassment/delays if it fails as being key reasons. Companies working on geo-location payment options within apps.
  • First Group (major bus company) are have a strong push for contactless adoption to remove cash from buses and reduce driver workload.
  • Biggest attraction from Bank point of view is security. Fraudulent transactions within legitimate systems (Apple/Google/Samsung Pay) are negligible although there is some evidence from Europe of Android handsets being hacked to spoof systems it is unclear how this is being done and it is not widespread.
  • Reports of criminals scanning contactless cards in pockets/wallets completely unfounded as are reports of stores cloning mobile devices. Cloning of physical card chips is an issue and consumers need to be told never to hand over cards. Physical theft of cards is biggest issue with contactless and 45% of thefts are not identified within first 24 hours.
  • Independent carrier backed payments systems (O2 Money and suchlike) have died out and banks working with carriers to incentivise native mobile payments (Branded cards, cashback, even free/discounted watches)
  • Banks will renegotiate terms with Apple/Google /Samsung as adoption rises. This is allowed within current contracts.
Personally I use Apple Pay a lot in the UK but less so in Netherlands as no banks here support it yet. My UK card on it will work with many contactless payment terminals here but it means I get charged a currency fee. I do have an account in Euros with the French bank Societe Generale which supports it and I could set that up but it is primarily used for my rental property in France so could get messy.