Mobile phones have become a fixture in the lives of just about every age group, but more than half of the young consumers who took part in the 2006 Generation X and Y payment and technology panel study conducted by Market Platform Dynamics feel the ability to use their mobile phones as a payment device is unnecessary.
Contactless payment, a credit or debit transaction through the use of a fob or technology-enabled device using radio frequency, infrared, carrier-based mobile or Bluetooth technologies, is not being immediately adopted. Thirty-eight percent of respondents claim using their phone as a payment method isn’t valuable to them, saying they don’t use their phones enough to make it worthwhile. Phone data usage has been slow to take off, but subscribers are beginning to use the Web for search and applications other than voice communications.
Generations X and Y behave similarly in terms of attitudes toward trying new technologies. The exceptions are youngest and oldest in the 16 to 43 year old age group. Those age 16 to 19 are more interested in trying new payment methods including mobile phones as a payment device. The older age bracket, 40 to 43, are less inclined to try Internet-based activities such as online shopping and online banking, making it less likely that group will adapt to payment via their cell phones. Online banking is taking hold among consumers, as is bill payment when implemented with the appropriate communication.
“At the outer age bands there are some differences, by and large people in their 20s and 30s behave similarly with respect to payment devices,” Market Platform Dynamics President Karen Webster told ClickZ Stats.
One barrier to contactless payment is concern over security. Over 60 percent of survey respondents avoid contactless fobs at this point. Existing payment options are a concern to just 4 percent of the group.
“I would expect that today you would get something of a lukewarm reception, as we did,” said Webster. “I would expect to see that change over time as devices become more prevalent and as the value proposition from the issuer develops.”
Incentives may encourage use of a particular payment device if a consumer is predisposed to the method, but the report says offering a reward isn’t likely to drive adoption of a controversial payment method. Men tend to be more motivated by rewards and use credit cards more often than women. Women typically use debit cards. Cash is still used predominantly by both Genteration X and Y, though it starts to be replaced by other means of payment as they age.
The findings are part of a quarterly survey of 4,000 randomly selected individuals in the U.S. between the ages of 16 and 43. Questions include preferences and behaviors toward payment and technology. Respondents were also asked to keep a diary of all transactions for one week.
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