A recent UK survey of over 2,000 mobile phone users, commissioned by Opinion Matters on behalf of Gemalto, found that only 32 per cent of consumers know what NFC stands for and a large number expressed security concerns about using a mobile wallet. This highlights the gap between consumer perception and the reality of the secure nature of mobile contactless payment technologies.
When asked if they have ever used or would use their phone as a mobile wallet, 34 per cent of respondents said they didn’t or wouldn’t due to security concerns, 31 per cent weren’t aware they could even do it and almost a quarter (24 per cent) said they didn’t trust it as they didn’t fully understand how it works. The research results show a clear need for further consumer education to dispel the myths surrounding mobile payments using NFC. Similarly to when ATMs, chip-and-PIN and e-commerce were introduced, consumers will need to build trust and become accustomed to mobile NFC by using the technology to learn how it works.
The mobile NFC research results highlight how consumers require more education about the security of mobile NFC payments, which is as secure as other payment systems currently in use. Key features which reinforce the security include:
1) The NFC SIM cards storing consumers’ payment credentials and the payment applications are certified according to security standards defined by financial services authorities and are comparable to chip-and-PIN security.
2) Consumers can choose to authenticate transactions by entering a PIN code on the payment application. Consumers can also request the PIN to be entered for all payments, even for small amounts – providing the end-user with complete control of protection features.
3) Secure over-the-air technology for remote management enables immediate remote blocking of the payment application.
Respondents expressed concern about what would happen if their phone was lost or stolen and many worried that somebody would make large purchases or acquire their bank details. In practice, the payment function can be protected by a personal PIN and should the handset be lost or stolen, the NFC payment issuer or mobile operator, via its Trusted Services Manager (TSM), can immediately lock or even delete the contactless payment application from the handset remotely.
Despite concerns, 35 per cent of respondents were positive about using mobile NFC services if they knew it was completely secure. As with much of Europe, the mobile contactless payments trend is gaining pace in the UK. Once consumers become more aware that their payment credentials are secure, they will become accustomed to the new method of mobile NFC payment and quickly realise the benefits, leading to increased usage.