How to Make Mobile Payments Work: Imitate Credit Cards

A new study from Points might point to the biggest barrier holding back mainstream use of mobile payment options like Android Pay and Apple Pay: and that barrier is rewards.

Credit cards often wind up costing the average consumer money, but they still flock to them in droves: and it’s not just because they let them defer payment on things they want or offer convenience. Let’s be honest: points, rewards, perks, and other factors all matter (not to mention the prestige associated with certain cards and brands).

Mobile app user research consistently points to security being the primary concern among potential mobile payments users. But if that’s the problem, then it doesn’t explain why users are so happy to share their data and privacy with other mobile app services. Perhaps the option of earning “rewards” and “points” could be the thing that draws the average smartphone user over the line and drives mainstream adaption of mobile payment systems. For now, such payment methods are more like an afterthought, in spite of efforts like Android Pay and Uber’s recent promotional offers to get users accustomed to the concept. Ultimately, there’s a big step between clicking a payment option in an app and “swiping” your phone at a register similar to credit card. Android and iOS app developers will have to bridge this gap.

While 94% of consumers polled reported that they would consider mobile payment methods more seriously if rewarded for it, 4 out of 5 state that security was “a major concern.”

If Apple Pay and Android Pay come around to agreeing with this idea, we could be seeing some compelling loyalty programs crop up in the coming year. I’m sure we’re not the only app developers in New York who would love to see the credit card rewards system “disrupted” by a safer, data-based, and less predatory alternative.