Of all of the issues that concern consumers about using mobile wallets in their everyday lives, perhaps one of the most disconcerting is the possibility of losing their smartphone. The devices contain a considerable amount of personal information, from contact numbers for friends and colleagues to potentially addresses, Internet browsing history and potentially other types of sensitive data. For some people, the thought of adding financial details to that list may be a step too far. 

Smartphones already possess password protection, but mobile payment adoption's lack of popularity suggests that many device owners don't have much faith in these defenses. A Lifehacker article detailed how a thief could use the emergency call window on an iPhone and push a variety of other buttons to bypass the device's safeguards and access its other functions. This method was specific to iOS 6.0.1, but a quick Google search will reveal numerous tips and warnings about how unauthorized users can slip through the authentication process. Additionally, many people use fairly simple passcodes such as "1234" or "0000". While simple-to-break credentials like "1234" are the responsibility of the owner, some people do not want to complicate the process of using their phone and will keep sensitive details off their equipment to ensure continued convenience. 

A recent PricewaterhouseCoopers' study revealed that many consumers are concerned that mobile wallets would change smartphones into a valuable target for theft, with 74 percent reporting that they would be nervous about having so much information in one place. Enhanced security measures, such as the ability to remotely wipe lost phones, rated as one way consumers would feel more comfortable placing sensitive information on the devices. More sophisticated security measures, like fingerprint scanning, could also help convince them to use mobile payments. 

Privacy issues are another reason why some smartphone owners are reluctant to buy items through their device. Many people don't want to share their data with various organizations. The PricewaterhouseCoopers' study noted that 58 percent of respondents don't want their phone companies to know too much about their spending habits. Consumers have little trust or faith in the scruples of mobile manufacturers, government agencies or retailers, either, and many did not want to be located by vendors – some equated it to being "stalked." 

Rather than leaving data in the hands of cellular companies, the study discovered that some consumers would be more comfortable providing the necessary mobile wallet information to a third party devoted to storing that data. 

Consumers are open to mobile payments
Should companies allay consumer concerns about mobile security, they likely could convince them to use the payment technology. PricewaterhouseCoopers' found that people who regularly make mobile payments are satisfied with wallet performance, and many study respondents thought that centralizing loyalty cards and coupons in one location, and that function as part of a transaction, was a compelling reason to use the system. More than half of the participants thought this could increase the speed of a purchase. 

Multi-factor authentication that doesn't rely on smartphones alone could persuade some consumers to implement the technology, especially if a third-party is managing it to help protect their privacy. Seventy-seven percent of respondents stated that a secondary ID would give them more confidence in the system. This way, a stolen phone would be less of an issue. As device owners will often choose insecure passwords, convenience will be another challenge to overcome before widespread adoption. This means being able to make quick payments and potentially a swift replacement program. 

Once some of these items are addressed, and the public is made more aware of them, then mobile payments could be the next change in how transactions are processed.