At this years Money 20/20 conference, Accenture presented its 2016 North America Digital Payments survey. The annual report used data from 4000 consumers in North America, tracking how they pay. The report discusses how payments are becoming mainstream, which players are setting themselves up to be industry leaders, and the future of digital payments. “Making payments is part of consumers’ everyday lives," the author writes. "Before long, making digital payments will be too. Because after years of steady momentum, digital payments is on the verge of becoming mainstream—and there’s no turning back.” But at the end of a section discussing the momentum of digital payments, Accenture threw in a tiny finding: "Even so, the use of mobile payments at the point of sale, which represents a significant portion of transaction volumes, is limited. Just 19 percent of consumers pay in store with their phones like last year." Read that line again: "Just 19 percent of consumers pay in store with their phones like last year." For those lacking a degree in awkward language translation, here is a visual representation of the sentence:
Read that again: Zero percent growth in mobile payments at POS. Not one or half a point. Zero. Sin crecimiento. Nada. Zilch. We've come across a few reports recently touting the growth of mobile payments, so what gives?. The problem lies in the epidemic plaguing mobile payment surveys. Most reports easily mix up mobile payments with mobile commerce. In this context, a mobile payment is a customer using a mobile payment device for a POS transaction. Mobile commerce is when a customer buys something on a mobile phone. The small difference in language doesn’t seem like much, but leads to two very different data sets. That’s why Visa showed mobile payments soaring from 18 percent to 54 percent in a recent study. Vocalink’s newest report on millennials states up front that it considers mobile payments to be “any payment made from or via a mobile phone,” aka mobile commerce. How many people chose to buy Amazon and iTunes products from their mobile phones instead of computers doesn’t give the full picture of mobile payment growth. The data may be new, but the reasons Accenture gave for the lack of mobile payment growth sound eerily familiar. “Those who have yet to (37 percent) point to a simple reason why. Cash and plastic cards meet their needs. The reality too is that merchants have been slow to invest in modern card readers. Even if people want to pay by smartphone, they often cannot.” Consumer behavior and a lack of hardware you say? Hmmm. Wait, isn’t that what we’ve been saying all along? In case you don't believe me, look here here and here. We still agree with Accenture that mobile payments are the future, but aren’t sure when the future exactly is. Accenture uses 2020 as a rough estimate for mobile payments becoming a majority payment option, which isn’t that crazy. At the same time, it takes a long time to move from 19 to 50 percent when your growth is at zero. Retailers moving to more advanced hardware will help growth. And over time, consumers will get more comfortable with mobile wallets. But let's just remember that cards are the 800 pound gorilla of mobile payments and aren't going away any time soon.