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 telecommunications 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 consumers are concerned that mobile payment solutions could 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 telecommunications 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% | 62% |
| Visa | 67% | 47% |
| PayPal | 62% | 45% |
| Mastercard | 59% | 42% |
| American Express | 54% | 34% |
| Discover | 49% | 32% |
¡°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
