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CoverStory

eMarketer, which tracks digital buying
trends, recently reported that 38.4

million U.S. consumers 14 years and older
have used mobile phones to pay for POS

purchases at least once in the past six
months. That's just 19.4 percent of U.S.

smartphone users.

future," the firm wrote. eMarketer expects the total of
mobile payments in the United States to reach $27.7
billion for all of 2016.

The Federal Reserve reported in March 2016 that 24
percent of adult Americans used their mobiles to
make payments last year. Among consumers with
smartphones, 28 percent made mobile payments. The
three most common payment activities smartphone
owners reported were paying bills using a mobile
app (65 percent), purchasing a physical item or digital
content remotely (42 percent), and paying for something
in a brick-and-mortar outlet (33 percent), the Fed said.

One reason for the slow adoption of mobile payments,
according to some experts, is a lack of near field
communication (NFC) terminals at merchant checkouts.
NFC is the underlying technology supporting contactless
(or tap-and-go) mobile payments. Virtually all mobile
operating systems support NFC functionality, and all
mobile carriers support NFC-based wallets.

"The primary reason remains that NFC is directly linked
to the number of EMV [Europay, Mastercard and Visa]
terminals there are in the market," said Aite Group LLC
Senior Analyst Thad Peterson. "The presence of NFC
terminals is not as universal as it will be in a couple of
years."

In addition, many businesses are unaware their new
EMV-compliant terminals can handle mobile payments,
said Alexis King, Director of Partner Relations at
National Merchants Association, a Temecula, Calif.-
based ISO. "It's the responsibility of ISOs and agents
selling to merchants to explain all the benefits [of EMV-
compliant terminals]," she said. "I don't think NFC has
really been explained to many merchants."

King said taking the time to explain and demonstrate
all the benefits of newly installed terminals, including
mobile payment acceptance, is a requirement for
NMA's agents. "They all wear Apple watches, so they
demonstrate how Apple Pay works," she noted. To date,
however, uptake of Apple Pay among NMA clients has
been limited to smaller merchants. "Until the large
retailers offer Apple Pay and make a push for it [through
marketing, etc.] I can't see it going much further," she
added.

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