Why are consumers backing away from m-payments?

There is an apparent lack of enthusiasm among Generation X and Y consumers for mobile payment technologies, with 62% feeling that using mobile phones as payment devices is unnecessary and 38% saying they don't use their phones enough to make it worthwhile, according to a survey by Market Platform Dynamics.

The 2006 Generation X and Y Payment and Technology panel study found that, overall, Generation X and Y are more alike than different, with the exception of the age bands at extremes of the spectrum. Those aged 16-19 have a greater interest in trying new technologies while those aged 40-43 tend to shy away from internet-based activities (such as online shopping and online banking).

Key findings
Among the survey's key findings:

• Generation X and Y use a variety of payment devices. Credit and debit payments are used in roughly the same proportions across all age groups, except at the outer bounds where cash and credit are used more (ages 16-19 and 40-43).
   
• There are significant gender differences with regard to payment preferences: Women tend to be heavier users of debit facilities while men are heavier users of credit facilities.
   
• Cash is still a dominant payment method for both Generation X and Y, but the percentage of users declines significantly with age.
   
• Rewards drive the acquisition of payment devices, but not the decision to use a particular payment device at the point of sale. Men in Generation X and Y tend to be more motivated by rewards than women.
   
• Security is still a major concern for all age groups with respect to contactless payment technologies. More than 60% of those surveyed said they would not pay with contactless fobs, citing security concerns. In contrast, only 4% have significant security concerns about existing payment devices.

The study is conducted quarterly, sampling some 4,000 randomly selected consumers in the US, aged 16-43. Respondents are asked questions about payment and technology preferences and asked to keep a diary of all their transactions for one week. The survey examines the types of payment instruments owned, length of ownership, online and mobile phone usage, spending and payment behaviour, and interest in new payment technologies.