Mobile & Online Payments

Does it matter if people tap their phones or not?

Does it matter if people tap their phones or not? Photo by Paisit Teeraphatsakool,
Written by Dave Birch

Perhaps the way mobile payments work now isn’t much of a guide to the way they will work in the future, says Dave Birch.

How are mobile payments getting on in the UK? According to the most recent figures from Transport for London, mobile phones now account for about 8% of their contactless transactions, so clearly there are plenty of people who already use the phone in their hand rather than reach for the card in their pocket. Yet, as many commentators have observed, out in the wider world – whether Android Pay or Tesco PayQwiq, Paym or Barclaycard Mobile App – mobile payments seem to be facing something of a struggle to become mainstream.

With Consult Hyperion’s annual ‘Tomorrow’s Transactions Forum‘ coming up this week, we asked our good friends at Crescendo to use their array of clever Twitter sentiment analysis tools to give us an up-to-the-minute snapshot of the UK. They found that in conversations about mobile payments (which are dominated by Apple Pay, accounting for almost four-fifths of the conversations) there are roughly twice as many negative conversations as positive ones! Now that might be because people are quick to vent on Twitter when something doesn’t work properly, but slower to praise when it does (I’m certainly guilty of this). But if we take the sentiment analysis at face value, it seems to show that customers by and large like mobile payments when they work but are frustrated with the experience because it just doesn’t work the way it should (and where it should).

There are a variety of reasons for this, ranging from gaps in the training of checkout staff to a failure of education (most people still don’t realise that the £30 limit that applies to contactless cards doesn’t apply to contactless mobile payments, so you can use your phone for your weekly shop), and confusion about acceptance (in some shops, for example, you can pay by contact with some cards, but not pay with those same cards using mobile contactless).

The £30 limit that applies to contactless cards doesn't apply to contactless mobile payments Click To Tweet

In-app (or in-browser)

Now, mobile payments is not all about mobile contactless. It’s about mobile-initiated transfer of money from one account (the consumer’s) to another account (the merchant’s). And while we use cards for this now (except in Starbucks, where we all use our app), with PSD2 on the horizon and MasterCard’s purchase of VocaLink, we can certainly expect to see more direct-to-account credit transfers in the consumer marketplace. So we asked Crescendo to see if there’s any talk around this. They found that right now, those conversations are dominated by Barclays Pingit, and while the negative comments still outweigh the positive comments, it is rather interestingly by a much smaller margin than for mobile contactless. I wonder if this is perhaps a weak signal that mobile payment apps will be more popular than mobile contactless taps?

Does any of this matter? Perhaps the way that mobile payments work now isn’t much of a guide to the way they will work in the future. Maybe tapping on things, whether a card or a phone or a wristband or anything else, is all a bit “last year”? Maybe it doesn’t matter whether people tap phones or cards, because in time all payments will be going in-app (or in-browser) and that’s where we should be focusing for the future. The web’s standard body, the World Wide Web Consortium (W3C), is currently working on a standard for these payments and this will likely hasten the physical and virtual convergence.

You can hear about the status of the standardisation process from the W3C themselves at the 20th annual Consult Hyperion ‘Tomorrow’s Transactions Forum’ in London this week. Oh, and you’ll hear all about the status of PSD2, the future for mass market payments, financial inclusion, innovative uses of the blockchain, privacy, the Internet of Things, transit payments and much else besides.

At this point, I would normally implore you to head over to our website to score a ticket for this unique event, but there’s no point today because all the tickets have been sold and there are no places left. If you’re one of the lucky few with a delegate place, see you Wednesday.

READ NEXT: What MasterCard’s acquisition of VocaLink might mean

– This article is reproduced with kind permission. Some minor changes have been made to reflect BankNXT style considerations. Read more here. Photo by Paisit Teeraphatsakool,

About the author

Dave Birch

David GW Birch is an author, adviser and commentator on digital financial services. He is Global Ambassador for Consult Hyperion (the secure electronic transactions consultancy that he helped to found), Technology Fellow at the Centre for the Study of Financial Innovation (the London-based think tank) and a Visiting Professor at the University of Surrey Business School. He is an internationally recognised thought leader in digital identity and digital money, and was named one of the global top 15 favourite sources of business information by Wired magazine.

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