The COVID-19 pandemic has propelled significant increases in digital payment adoption across the US. A study by Mastercard found contactless transactions grew 3x as fast as non-contactless transactions in the grocery and drugstore categories between February and March 2020.
While contactless payments are on the rise, there remains a significant proportion of consumers who have not adopted fully to this form of payment. These fence-sitters present a business challenge for technology and payment companies and how they focus their efforts on converting this segment into adopters during this unprecedented global health crisis.
At Maru/Matchbox, we dig into these challenges by exploring how consumers feel, behave, and think, enabling us to close the gap between what consumers say and what they actually do. Around digital payments, we have leveraged our Maru/HUB platform to engage over 9,250 consumers annually, using a variety of System 1 and System 2 techniques to capture robust emotional and behavioral insights. This MoneyScreen product makes data available for deep exploration on Maru/HUB’s interactive data visualization platform.
MoneyScreen leverages Maru/HUB’s System 1 tools to uncover how consumers truly feel and think about a concept, such as Apple Pay, in addition to how the adoption of the concept would change their behavior. We capture consumer sentiment, behavioral data like monthly spend, demographic and banking profiles on a quarterly basis.
Such foresight and insight generation closes the say/do gap by reaching deep into how choices and decisions are made and exposes the emotional dynamics around these. Technology and payment companies that do this, can influence, and predict adoption behavior more accurately providing improved future brand outcomes.
In a recent MoneyScreen study, we investigate barriers to entry for fence-sitters and how they compare with those of more likely Adopters and definitive Non-Adopters. One of the primary payment categories we explore in MoneyScreen is contactless payments.
Based on our research, three concerns stand out for fence-sitters before they become a full contactless payment adopter.
1. More reassurance and clarity needed
The first concern is the perception that digital wallets are not a secure payment option. 47% of the US consumers who are also fence-sitters agree according to our MoneyScreen study. Many are still worried that hackers can easily steal card information if their phone gets stolen. More reassurance and communication would go a long way to help persuade consumers that a digital wallet is a more secure and safer option than physical banking or loyalty cards.
As a researcher, I understand that personal information stored is heavily encrypted and tokenized on our smart devices. I also know that none of my actual sensitive payment information such as card numbers or bank account numbers are stored within the digital wallet. But until I hear language that tells the consumer in a clear and direct way, it will be hard to overcome people’s security concerns about their payment information. Once providers can make this differentiation, it will pivot more into considering the switch to some form of contactless payment.
2. Eliminate secondary form of payment
A second concern that 41% of fence-sitters in our MoneyScreen study have, is that the mobile device payment option will not work when needed. Nothing is more embarrassing when you try to buy lunch and the technology fails you and you have no other way of paying.
For this reason, many feel compelled to carry multiple forms of payments (some cash and at least one physical credit card) just in case, and that defeats the purpose of having a mobile payment setup.
What can phone manufacturers, credit card companies, and payment terminals do to address this fear, or enable smooth contactless transactions every time? To eliminate the need to carry a second form of payment, is there a backup option on the smartphone or mobile wallet to give consumers more peace of mind, should the cardless payment fail?
3. Wider acceptance and adoption
The last barrier for 43% of the fence sitters in our MoneyScreen study, is the concern that it will not be accepted where they shop. I prefer to shop at small and local businesses when possible, and I seldom see the electronic payment option being advertised in their storefront or on their cash registers.
To encourage wider acceptance and adoption by small and local merchants, a greater focus on education and an emphasis on the benefits of mobile payments (e.g., convenience, speed, improved time management, streamlined operations, etc.) will help.
Unlocking consumer emotion key to converting fence-sitters
The ongoing pandemic is poised to drive more payment innovations in the near term. Given there is not a foreseeable end in sight, and we are all trying to focus on safety first, companies must also be sensitive to, and meet, the wider emotional needs of their customers.
For more on how your business can leverage the power of MoneyScreen to shape your innovation process, contact us today.