2014

Market Strategies International Reports: Security Concerns Over Mobile Payments May Give Banks Marketing Advantage with Current Customers

LIVONIA, Mich., Feb. 15, 2012 /PRNewswire/ -- With recent reports of high-visibility cyber-attacks on confidential information as a reminder (i.e., Zappos/Amazon), consumers continue to have serious concerns about online and mobile security. For many of America's retail banks; however, these concerns may provide a significant competitive advantage over other financial services, technology and communications companies.This, according to a recent study of 2,000 consumers conducted by research consultancy Market Strategies International.

Study findings reveal that more than 6 of 10 consumersare concerned that mobile payment solutionscould jeopardize their financial and/or personal security.

"As increasing numbers of consumers indicate their willingness to use mobile and smartphones to purchase goods and services, the corresponding level of concern about the security of such online transactions remains steady and significant," said Ann Graham Hannon, vice president of the financial services division at Market Strategies.

Hannon points out that the major providers of mobile payment services are in a position to convert this security challenge into a competitive advantage, noting that banks may have the biggest advantage with their existing customers.

Results from the study show that consumers prefer a mobile payment solutions offered by a financial services company by a wide margin over a technology or communications company. Within this financial services group of likely providers, consumers indicated those they consider most trustworthy as follows:

 

Smartphone users

Standard mobile phone users

Their current banks         

73 percent

62 percent

Visa                                 

67 percent

47 percent

PayPal                            

62 percent

 45 percent

Mastercard                      

59 percent

42 percent

American Express           

54 percent

34 percent

Discover                          

49 percent 

32 percent

 

"With a well-designed, focused marketing initiative, banks could identify existing customers with the highest propensity to utilize their mobile payment services and market directly to these high-potential prospects. At this time, the banks appear to have a great business opportunity in their own backyards," said Hannon.

Another interesting aspect of the study is the emergence of PayPal scoring at parity with Visa and Mastercard as a trusted provider. Hannon said, "This means that banks, which typically partner with VISA and Mastercard in their credit card businesses, will also have a further opportunity to consider working with PayPal as a trusted partner in the mobile payments space."

She added that banks, which have been the target of significant consumer criticism in recent years, now have an extraordinary opportunity to leverage what has traditionally been their strong suit: the reputation for protecting their customers' money and related personal information.

About the Study

Market Strategies interviewed a national sample of 2,000 consumers aged 18 to 85 between October 3 and October 11, 2011. These consumers were individual or household financial decision makers that have at least one financial account and a mobile phone. Respondents were recruited from the uSamp opt-in online panel of US adults and were interviewed online. Quotas were created by gender and age to match the demographics of the US population of mobile phone users. Due to its opt-in nature, this online panel (like most others) does not yield a random probability sample of the target population. As such, it is not possible to compute a margin of error or to statistically quantify the accuracy of projections. Market Strategies will supply the exact wording of all survey questions upon request.

About Market Strategies International

Market Strategies International is a market research consultancy with deep expertise in communications, energy, financial services, healthcare and technology. We design and implement intelligent research and deliver meaningful results that help companies make business decisions with confidence. Founded in 1989, Market Strategies consistently ranks as one of the 25 largest global market research firms, according to an annual report published in Marketing News.

SOURCE Market Strategies International



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