Jeremy Allaire, the Co-Founder of financial technology developer Circle, recently argued that mobile payment systems are more secure than the majority of consumers believe. Htet Tayza comments.
New research conducted by NTT DATA indicates that consumer fears are impeding the adoption of mobile payment technology worldwide. Of 2,000 consumers polled globally, over half expressed the belief that cash is more secure than mobile payments. In contrast of the 300 company executives questioned, 60% said that mobile payments will help them build their firms, because they are secure.
Commenting, NTT DATA’s Senior Practise Lead For Retail Banking, Peter Olynick, said: “Fear is a powerful inhibitor, and fraud fear is top of mind for many consumers… Consumers are not just worried about losing one or two transactions, they fear having their identity stolen. If financial institutions can mitigate those fears and improve merchant adoption for mobile, we will see consumer adoption rates begin to accelerate.”
Allaire refuted these perceptions while speaking at the Cambridge Cyber Summit, according to Asia One, a regional news source. Sponsored by news outlet CNBC, the Michigan Institute of Technology and The Aspen Institute, which focuses on fostering “enlightened leadership,” this event was devoted to tackling key cybersecurity challenges. Explaining his argument on mobile payments to CNBC, Allaire stated:
“We need a more resilient model for payments, where I don’t have to transmit my bank account credentials to everyone I want to send a payment to.” Going further, he said: “New mobile-payment based models are, in some ways, more secure. Because in a model like Circle’s, for example, we never transmit your personal information or your financial credentials to the people you’re paying.”
Allaire argued that technologies such as biometric fingerprint scans supply an extra layer of security for mobile payment users. Expanding, he commented: “I do think that the existing payment methods, like the traditional card models – there’s a lot of risk in that…You’re essentially giving out the keys to your bank account to everyone you do business with,” whereas details are harder to access through mobile.
As smartphone technology advances, more consumers are executing transactions via mobile. The global mobile payments market is expected to expand significantly between 2016 and 2020, recording a Compound Annual Growth Rate of 36.26%. Yet consumers have concerns over the security of mobile payments and there is evidence which suggests that these concerns are valid. Figures show, for instance, that mobile usage has fueled card fraud in the Association of South-East Asian Nations member states.
It is key that going forward, the global financial technology industry alleviates consumer concerns, in order to make mobile payments seem like more viable options. In the NTA DATA survey, for example, 75% of those polled said that they would be more likely to utilise mobile payments if they were given guarantees against monetary fraud, but just 44% of firms questioned currently or plan to supply these guarantees. If companies listen to consumers, they can make mobile payment services more attractive.