Despite the introduction of Apple Pay and growing media focus on mobile payments, consumer interest in mobile payments did not grow very much between December 2013 and 2014, according to new research from 451 Research.

The report, “Security, convenience and acceptance predicate mobile payment adoption,” found that the number of consumers likely to make mobile payments has increased just 2 points in the past year for a total of 24 percent. The lack of a mobile alternative that is better than current payment mechanisms based on consumer interest in security, ease of use and wide acceptance is the root cause of low consumer adoption for mobile payments, per the report.

“Retailers must take note of lingering security concerns in the mobile wallet space,” said Jordan McKee, senior analyst for mobile payments at 451 Research, New York. “For those merchants interested in deploying their own, branded payment applications, messaging around security must be clear and straightforward.

“Attention must also be paid to the overall user experience – running the gamut from onboarding to in-app navigation to payment – to ensure uptake and ongoing usage,” he said.

“Before value-added services such as loyalty and rewards can thrive, merchants need to first focus on security and ease of use.”

Three basic requirements
Consumers have three fundamental requirements that must be satisfied before adoption and use can take off.

The critical needs for mobile payments are security, ease of use and widespread acceptance. If a payment system fails to meet these requirements, its mass-market potential will be limited, according to 451 Research.

However, no existing offerings currently boast all three of these minimum consumer demands.

A matter of perception
The data shows that 84 percent of consumers name security as one of the most important factors in a mobile payments app. Ease of use was named by 66 percent while 64 percent pointed to widespread acceptance.

There is a significant gap between these three factors and others, with just 13 percent naming transaction history as important, 13 percent integration with other apps, 10 percent coupons, loyalty cards and rewards and 5 percent sending money to friends.

Security is the largest obstacle to more rapid adoption of mobile payment services, with 47 percent naming it as the primary reason why they are unlikely to make mobile payments.

However, since mobile wallets offer the same safeguards as physical payments cards in addition to mobile-centric features, it is clear that it is largely an issue of perception.

The perception of mobile security is advancing, with the number of consumers who feel mobile payments are more secure than credit cards increasing by 57 percent and the number of consumers who feel mobile payments are less secure than credit cards failing by almost 54 percent.

“Mobile payment security perceptions are improving, and that’s a promising sign for consumer uptake,” Mr. McKee said. “Security must be front and center in the mobile wallet value proposition to continue the positive momentum.

Laying the infrastructure
Apple is one of the few vendors that have been successful in making consumers feel that mobile payments are highly secure.

Features such as biometrics and dynamic tokens make Apple Pay more secure than a plastic payment card. However, it was Apple’s messaging around these features plus its brand equity that helped make consumers feel more secure.

Other vendors looking to be successful in mobile payments need to place a bigger emphasis on consumer perception as it relates to the security of their offerings.

“In 2015, retailers should be thinking about laying the infrastructure for mobile payments to thrive,” Mr. McKee said. “A universal acceptance infrastructure will serve benefits up and down the mobile commerce value chain.”

Final Take
Chantal Tode is senior editor on Mobile Commerce Daily, New York