In both the US and in the UK, ‘Black Friday’ and ‘Cyber Monday’ shopping season broke spending records.
Amazon sold more than 7.4 million items on Black Friday 2015 (86 items per second!), up from 5.5 million in 2014, giving the online retailer its biggest sales day ever in the UK. Black Friday was also the best ever sales day for AppliancesDirect.co.uk which saw a 120% year-on-year increase.
In the US, the shopping frenzy is very much an in-store affair, whereas in the UK much of the shopping is done online. Consumers are used to making online payments and, after some initial reluctance, are now moving towards mobile payments as well. US-based Forrester Research predicts that mobile payments will top $90 billion in the US by the end of 2017, a dramatic increase from $12.8 billion in 2012.
This growth stems from the increased adoption of mobile payment methods, such as contactless Near Field Communication (NFC) technologies by retailers, and native manufacturer ‘wallet’ apps such as the Apple Wallet available on consumers’ handsets.
Security and privacy concerns remain prevalent among US consumers, who are deciding not to use their mobile devices to make purchasing decisions according to new research from Inside Secure. Concerns over loss of privacy and identity theft, loss of security around financial transactions, data loss and the perception of insecurity were in the front of the mind for more than 1,200 US consumers surveyed on their attitudes to mobile payments by the security vendor.
39% were planning to use their mobile device to make purchases, a slight increase from 33% that did last year, and 17% of those that did not do so in 2014 were hoping to do so this year.
Significantly, 70% of those not planning to make a mobile payment cited concerns around identity theft as their main reason, with the same numbers claiming mobile payment fraud and the privacy of their transaction data was preventing them adopting mobile payment methods.
With Apple Pay, Android Pay and Samsung Pay all vying for market share in what is predicted to be a lucrative international market, as well as banks recognising they are approaching their “Uber moment” with a looming threat that technology will replace high street branches, companies need to alleviate consumer concerns if they are to capitalise on the technology.
However, Inside Secure’s research noted that US shoppers trust their banks more than consumer brands when it comes to managing mobile payments, with 51% preferring to use an app from their bank rather than one provided by a third party such as Apple or Google. The research highlights the problem these technology giants have in persuading consumers to use their services.
This is good news for the banks, but complacency on either side of the divide when it comes to security and consumer perception could be catastrophic for the mobile payments industry as a whole.