Mobile Payments – Horrible trade-off

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Security and a good user experience are almost mutually exclusive.

• I continue to believe that the trade-off between ease of use and security remains the single biggest impediment to the take-off of mobile payments.
• In 2012 every man and his dog was creating an app store as this was then a major differentiator in the user experience.
• In 2015 we are seeing the same thing again with mobile payments as every bank, ecosystem and payments processor wants to own the customer when it comes to paying for goods and services.
• Unfortunately, in this mad scramble almost everyone has forgotten that unless paying with a mobile phone is much easier than presenting a plastic card, no one will bother.
• This is where almost everyone falls over because those that have designed the solution almost always know nothing about the user experience.
• One only has to look at the Merchant Customer Exchange (MCX – see here), Chase’s recently announced mobile wallet or any solution based on QR codes to realise that consumers will loathe using these offerings.
• These solutions have addressed the problem from the security angle and a desire to ensure that fraud rates are at least as good if not better than the existing plastic cards.
• Unfortunately, this thought process lays bare the critical problem with security and mobile payments in particular.
• This problem is that good security and a good user experience are almost always mutually exclusive.
• This means that a secure service is horrible to use and an easy and fun to use service is insecure.
• So far, I do not think that anyone has come close to solving this problem as even Apple Pay is still experiencing fraud rates that are far above where they need to be to see real traction.
• In actions where the user has no choice (like airport security) ease of use does not matter but where one is trying to entice a user to try something new, it is of paramount importance.
• Hence, it will be the service that solves this problem that will win.
• At the head of this race has to be Apple which has done a good job in putting together an easy to use, end to end service but now it has to help its partners to bring the fraud rate down.
• I think that the banks, merchants and credit card companies have no chance as their understanding of how important it is now to provide a good user experience is almost non-existent.
• Google also has a good opportunity here, but I think it will continue to be hobbled by the inherent fragmentation and insecurity of the Android platform upon which it is based.
• I suspect that users will be using plastic for much longer than those investing heavily in mobile payments would like us to believe.