Security Tops Reasons to Avoid Android Pay

Some 91% of US adult smartphone owners have heard of a mobile payment service such as PayPal (85%), Google Wallet/Android Pay (51%) and Apple Pay (45%). Of those, almost six in 10 currently use at least one, according to recent survey results from YouGov.

Of those who don’t, 81% cited security as a main concern; and 35% flatly said that they “wouldn’t trust the internet” with their money. That was the No. 2 response after “having no need for them” (59%).

The research however shows that mobile payments are becoming more and more entrenched into culture, so security will be a conversation that will need to take a central role. Helping spur the market: Google launched Android Pay last week, which is a renaming/streamlining of the Google Wallet service. AT&T, Verizon and T-Mobile have all agreed to pre-install it on phones—bringing mobile payments that much closer to mass deployment.

Asked for which reasons they had used a mobile payment service, YouGov respondents who currently use one noted these as the top five:

  • To make a purchase online (50% of users; 27% of smartphone owners overall);
  • To pay or send money to a business/store for a product or service (39% of users; 21% of smartphone owners);
  • To send money to a friend or family member (37% of users; 20% of smartphone owners);
  • To transfer money between their own accounts (33% of users; 18% of smartphone owners); and
  • To receive money from a friend or family member (28% of users; 15% of smartphone owners).

However, there were some notable disparities when sorting the results by demographic group. For example, among mobile payment service users, men were more likely than women to send money to a friend or family member (41% vs. 34%), while women were more apt to make a purchase online (55% vs. 46%). And while 35-54-year-olds were less likely than 18-34-year-olds to report being mobile payment users, those who are were more apt to say they had used one to make a purchase in a physical store (23% vs. 15%).

Overall, slightly fewer than one in 10 (9% of) adult smartphone owners said they have used a mobile payment service to make an in-store purchase, with this more common among men (12%) than women (6%) and among Hispanics (13%) than Caucasian (8%) or Black (9%) respondents.

Of the few making an in-store purchase using a mobile payment service, the most common types of purchases were clothing (46%), on-the-go food such as snacks and coffee (45%), electronics such as tablets and smartphones (44%) and personal care items (37%).

But for payments to really take off, the space needs to fix the security perception issue. In March, it was revealed that US criminal gangs are taking advantage of security gaps in the provisioning of new cards to commit high levels of fraud on the new Apple Pay mobile payment platform. The fraudsters buy up stolen card-not-present (CNP) data widely available on underground internet forums and load it onto iPhones with Apple Pay enabled. These details are then sent to the card issuing bank in question along with information about iTunes activity and the device, provided by Apple, to help the bank decide if it’s legit or not. However, some banks only request social security numbers for identification, which themselves are easy for criminals to obtain, and some offer call center numbers to call – manned by operatives who are proving easy for fraudsters to socially engineer. Once a card is provisioned, the criminal gangs are using feet on the ground to spend via Apple Pay on high value retail items including, ironically, in Apple Stores.

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