Smartphones are a transformative technology, having changed the way people communicate, purchase items, interact with their banks and otherwise engaging with the world at large. In some ways, the whole world is available through a user's fingertips, from researching information to the ability to reach out to a friend, family member or colleague. As the technology matures, and as it's used by more people, it will only play a more prominent role in people's lives than it does now. However, there are a few obstacles to further integration to this process. 

The importance of mobile protection
Based on a recent Credit Union National Assocation (CUNA) survey, 77.7 percent of smartphone owners prioritize security above all else as the most important part of making mobile payments, and for using their devices in general. By contrast, other factors for device-based transactions were much less important to respondents. These included battery life (6.9 percent), how confusing the method was to use (6.4 percent), the lack of rewards or bonus features (5.1 percent) and not having budget-tracking abilities (4.0 percent). 

"While there have been many advances made with mobile security in recent years, respondents' concerns over security indicate financial institutions and companies in the mobile space must continue to stress their focus on security with their customers," said CUNA Executive Vice President Paul Gentile.

Potentially conflicting desires
Despite the study's finding that most users rate security as their foremost concern, the vast majority of respondents (91.6 percent) also said that the easy use is the most significant advantage of making mobile payments. In some ways, this fact is at odds with the importance of security. If trends in password selection and other credentials are any indicator, security may be prized, but it often isn't implemented effectively. Without an analysis of what users own best practices are for password protection and PIN use are, their emphasis on payment safeguards does not tell the whole story. Organizations may have to provide best-in-class safeguards of their own to create the kind of mobile environment smartphone owners are willing to make transactions in. They should also ensure that these measures work smoothly, without obstructing the purchasing process. 

The CUNA survey also indicated that smartphone owners are growing more accustomed to mobile payments, as more than half of respondents said they performed at least one mobile transaction. Most also spent $50 or more when using their phone to buy items (34 percent), with purchases between $25.01 and $50 coming in next (9.2 percent), and smaller payments occurring even less frequently. Meanwhile, 44.3 percent reported never using their phone to buy anything. 

As might be expected, younger individuals were more likely to use their phone for payments, with 59.6 percent of 30-44-year-old smartphone owners buying items with their devices, and 57.9 percent of 18-29 year olds doing the same. Among anyone age 61 or more, only 24.1 percent were likely to buy anything that way. 

Since using mobile payments relies on both how easy they are to accomplish and how secure they are, it will be important that organizations balance these two factors. Simple to use identity verification should be a key consideration for businesses that want to benefit from smartphone-based transactions, but that shouldn't come at the cost of safeguards to sensitive financial data. Device-based, multi-factor authentication is one way to achieve this goal, as it relies on personal devices as well as passwords to create a safe, but also convenient, way to complete a transaction.