M-Commerce: Only time will tell

There is speculation that 2012 will bring a surge in contactless mobile phone payment services and that the plastic we are so familiar with will be cast aside in favour of the latest technology.

Significant developments in contactless payments have been made since the launch of Quick Tap by Orange and Barclaycard in May, which was closely followed by Google Wallet with MasterCard.

The convenience these services offer is likely to be a hit with the growing population of smartphone users, but will this phenomenon put our data at risk?

The long jump

The forthcoming London Olympic Games has spurred major credit card companies to partner with mobile operators and launch their services in time for the start, implementing the huge infrastructure required for contactless payments to function.

Data from Google’s ‘Our Mobile Planet’ tool has shown that while 28% of UK smartphone owners make purchases using their devices; 87% of those say they do so infrequently. These statistics suggest the transition from e-commerce enabled by mobile phones to using a smartphone to make contactless payments could be slower than anticipated.

Trust in technology

Financial institutions first have to gain their existing customers’ trust before this can be a proven success. The director of mobile payments and ticketing at Orange stressed the importance of having a heritage of customer support in encouraging users to favour contactless payment services enabled by wireless technology.

Google’s statistics reveal that 34% of the smartphone users who don’t make purchases by using their mobile have security concerns. While Barclaycard offers a 100% guarantee against fraud on any contactless payment, there will always be an argument against storing direct access to your personal funds on a device that is so vulnerable to loss and theft.

However, one call to your mobile operator is all it takes to cancel all services, compared to cancelling a multitude of cards from a lost wallet which takes considerably more time and effort.

New heights

Information is fast becoming the currency of the future, and mobile technology has undoubtedly been a catalyst for this change. The ‘always-on’ generation relies on being able to access information and services at all times, forcing them to understand the value of information and thus be better at protecting it.

Unsurprisingly, the younger generation is more enthusiastic to seize the opportunity to use smartphones to buy, demonstrating a greater degree of confidence in mobile operators and the companies they transact with to keep up with the security demands of new technology.

Marginally different to chip-and-pin protection, contactless payment services require the consumer to input their pin into their own device rather than the merchant’s, allowing potentially greater privacy and completely eradicating the risk of card skimming and shoulder-surfing. As the foundations are laid for M-Commerce, it is possible that our defences against fraud will become stronger.

Hannah Tufts has been a Communications Assistant with The Security Company (TSC) for one year. She is responsible for internal communications within TSC in addition to managing client communications campaigns and providing marketing support. Hannah graduated in July 2011 from the University of Reading with a 2:1 in English and American Literature. Whilst studying Hannah was a regular contributor to the Travel, Comment and Debate sections of the university newspaper. Hannah has gained experience in the Communications field through her time spent with a variety of organisations including WEXAS Traveller Magazine, Penguin Group and CSC, where she developed her writing skills and in-depth understanding of different target-audiences.