Personal Finance

Is the World Finally Ready for Mobile Payments?

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Last year was a turning point for mobile payments, according to the 2013 MasterCard Mobile Payments Study. It’s the second year MasterCard conducted the study, which tracks social media conversations to gauge consumer and merchant sentiment toward technological advances in digital transactions.

Based on the insight gained from observing 13 million conversations on Facebook, Twitter, blogs and other online forums, MasterCard projects 2014 could be the Year of Mobile Payments. There was a huge shift in consumer adoption of mobile payment options, with so-called “adopters” driving 81% of the conversations about mobile payments in 2013. In 2012, only 32% of the social media chatter came from adopters.

The report is based on conversations that occurred between March 2013 and December 2013 in 56 markets and 26 languages in North America, South America, Europe, Africa, Asia and the Pacific Rim. PRIME Research conducted the study for MasterCard.

We Want More Mobile

The conversation about mobile payments has changed in a meaningful way, not only for financial services and consumers but also for merchants. In 2012, people were more concerned about whether they should use mobile payments, but last year, the question morphed from “why?” to “which?” With consumers talking about which services to use, businesses have an increased interest in accepting such forms of payment.

The study found that 86% of consumers and merchants are in favor of using/accepting mobile payments, but when it comes to actually using these tools, there’s a lot of room for improvement. Consumers expressed a high level of frustration with the mobile-payment experience, though it is unclear if that unhappiness stems from dealing with the merchant or the payment platform itself. Still, things are obviously getting better: 63% of conversations about the mobile-payment experience were positive in 2013, up from 34% in 2012.

Security a Top Concern

As cool and convenient as mobile payments can be, shoppers maintain a sense of caution. Given the ever-expanding coverage of data breaches, it will be interesting to see how the concerns about security play out in the next edition of this study.

The conversations suggested confusion when it came to security concerns — how do mobile payments systems prevent identity theft, and how do these tools deal with fraud liability? As far as gauging sentiment, 66% of security conversations were negative.

It’s a valid concern, and you should always be careful when trying something out that could put your finances at risk. There’s nothing wrong with trying new tools, but it should be done with care, and you should monitor your bank accounts more closely when doing so. Checking your transaction activity daily is one of the best ways to spot fraudulent charges.

You should also monitor your credit if identity theft is a concern for you. You can pay for a credit monitoring service or there are free tools like the Credit Report Card that let you monitor it for free. The Report Card will update two of your credit scores for free every month. Any unexpected, major changes in your score could signal identity theft and you should pull copies of your credit reports (you can get them for free once a year) to investigate.

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