Consumers Weigh in on Different Payment Solutions and Technology Standards
Resource for Evaluating a Disruptive Innovation (READI) Model
The READI Model was developed by Crimson Hexagon to illustrate how social intelligence can play a pivotal role in an organization’s decision-making and product development process. The READI Model outlines a new path industry incumbents and institutional investors can take when evaluating consumer-facing innovations. Analyzing the underlying motivations of consumers in both existing and emerging markets, the READI Model empowers these firms to better understand the market opportunities or threats presented by a disruptive innovation, and to help optimize a timely, strategic organizational response. Are you READI?
The advent of mobile payment technologies has shaken up the global marketplace, creating new ways for us to pay for the goods and services we consume on a daily basis. In addition to more traditional payment media — from cash, to personal checks, to credit cards — many consumers now have the option to utilize new payment services performed via a mobile device.
Because mobile payments represent disruptive innovation, market adoption raises new questions for many affected industries: retail banks, credit card companies, online payment systems, institutional investors, countless merchants, and many more players that are entrenched in the value chain.
So what is the current state of mobile payments?
We begin our inquiry with a more macro evaluation of the mobile payments industry, as it is perceived through the lens of the consumer. Using the Crimson Hexagon ForSight™ platform, we analyzed over 42,000 consumer opinions about mobile payments over an 18-month time period—and organized into bullish and bearish sentiment. Overall, we found that consumers tend to be very bullish about the industry (58%), and excitement to use this technology represents the largest driver of conversation at 43%. In fact, the proportion of conversation related to consumer excitement increased 15% over this time period. 7% even concluded that mobile payments are the future of payments, embodying a pivotal evolutionary step towards a cashless paradise.
On the negative side, we found that some consumers feel the market is too crowded and are confused by different product offerings (7%). Another 6% remain skeptical and resistant to adopt the technology. However, the single largest concern for consumers is the security of these new mobile payment products (22%).
There are many different players in the mobile payment space. Top of mind, you may think of Jack Dorsey’s Square, Google Wallet, or maybe LevelUp. But, the reality is that as new market entrants continue to proliferate, traditional financial institutions will also have to decide if the technology is worth the investment and then craft their response.
As the industry continues to complicate amidst a fierce battle of technology standards, we can’t help but speculate as to the potential victor. Will the future of payments be controlled by quick response (QR) codes, near field communication (NFC), cloud-based solutions, or something else? Given what we’ve already been able to learn about mobile payments through the eyes of the consumer, could leveraging a new framework such as the READI Model help guide your organization’s strategic plan of action?
The second part of this study explores consumer reactions to using Square Wallet vs. Google Wallet. We will also share our analytic findings related to the highly publicized partnership between Square and Starbucks. Stay tuned!
What is your preferred method of payment for goods and services? Tweet us @crimsonhexagon!