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April 25, 2012updated 23 Aug 2016 2:52pm

Nearly a third of Britons want mobile payments now

UK consumers are chomping at the bit to use their smartphones to pay for goods and services, despite endless delays by the industry players in rolling out mobile payment platforms.

By Allan Swann

The research by YouGov and Intelligent Environments shows that 29% of British mobile owners would use their mobile more than cash or cards to pay for goods or services worth less than £20 – if only their phone had the capability.

The figure rises amongst 18-24 year olds, with 41% interested in the option.

O2's Mobile Wallet
O2’s mobile wallet has seen repeated delays

Across all the mobile phone users surveyed, 41% would shop online using their phone, 34% would use it to pay bills, 30% would pay for tickets and 21% would be happy paying friends or family using their phone.

iPhone users tend to be the biggest cheerleaders for mobile payments, with 60% saying that they would like to manage their bank account (against a market average of 42%), shop online (58% vs. 41%), pay for a travel ticket (46% vs. 30%), or pay a friend or relative (29% vs. 21%) using their mobile phone.

49% of smartphone owners would be interested in swiping their phone to make a payment in-store. This figure rises to 61% of iPhone owners, but falls to 47% of Android and 39% of BlackBerry owners. This is an increase on 12 months ago when 42% of smartphone users said that they would like to ‘wave and pay’.

The rise of NFC and its mobile technologies, such as Google Wallet, have been hamstrung by a lack of standardisation across the industry, and concerns over the costs of upgrading point-of-sale devices in retail outlets. NFC has long been available on credit and debit cards (See CBRs feature about the state of mobile banking here)

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"From mobile operators to financial services companies, businesses in all sectors are taking full advantage of this trend and rise in consumer smartphone adoption, evident from the first mobile wallet offerings beginning to enter the UK market. To ensure their success, businesses need to provide compelling and intuitive mobile applications and services that bring convenience and simplicity to consumers’ lives," said James Richards, Director of Mobile at Intelligent Environments.

Telefonica has repeatedly delayed its O2 Wallet, to get the user experience up to scratch. It was originally due to launch at the end of 2011, but now has a vague launch target of ‘before the Summer Olympics.’

Alongside this, Project Oscar, that is, Everything Everywhere (owners of T-Mobile and Orange), Vodafone and Telefonica’s (O2) joint submission to the EC for its new payment mechanism, has been stalled as the authorities run a fine toothed comb over the proposal. It is now doubtful for its promised Olympics launch also.

Vodafone has also announced a worldwide joint venture with Visa to produce its Vodafone mobile wallet, which will use Visa PayWave NFC technology. Announced in February the service will initially be launched ‘in the coming financial year‘. No dates have been confirmed.

Google wallet has been beset by a number of delays, the latest of which was a security hole that saw Google pull the wallet entirely. It too had been expected to be running by Olympics 2012.

Realistically, the lack of compatible devices has been a problem for the network operators and banks. More are launching, but the big shift is expected to come when Apple puts NFC chips in its next iPhone, expected to be launched mid-year. Apple is expected to launch its own mobile wallet service with it.

Further Reading:

Q&A with Sybase365’s Diarmiud Mallon discusses the cashless mobile payment world.

Q&A with Fiserv’s Serge Van Dam on the timidity of UK banks when it comes to mobile payment systems.

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