Gemalto Survey Highlights Need for More Consumer Education on Mobile NFC Security and Services

9 November 2011

• Over one third of respondents worry about using their phone as a mobile wallet due to security concerns – even though it’s as safe as other payment systems currently in use

• 46 per cent of respondents were concerned that somebody would run up huge bills if their NFC phone was lost or stolen – despite technology already in place preventing misuse and certified by financial institutions

• Only 32 per cent of interviewees have heard of or understand what NFC is

A recent UK survey of over 2,000 mobile phone users commissioned by Opinion Matters
on behalf of Gemalto, the world leader in digital security, found that only 32 per cent of consumers know what NFC stands for, and a large number expressed security concerns about using a mobile wallet. This highlights the gap between consumer perception and the reality of the secure nature of mobile contactless payment technologies.

When asked if they have ever used or would use their phone as a mobile wallet, 34 per cent of respondents said they didn’t or wouldn’t due to security concerns, 31 per cent weren’t aware they could even do it and almost a quarter (24 per cent) said they didn’t trust it as they didn’t fully understand how it works. The research results show a clear need for further consumer education to dispel the myths surrounding mobile payments using NFC. Similarly to when ATMs, chip-and-PIN and e-commerce were introduced, consumers will need to build trust and become accustomed to mobile NFC by using the technology to learn how it works.
“The reality is that mobile NFC payments are extremely safe and users have complete control over the value of payments made on their handsets,” said Nassir Ghrous, head of mobile communications, Gemalto UK and Ireland.

“The value of mobile NFC transforms the handset into a ‘mobile wallet’ where consumers can store credit cards, gift cards, loyalty cards, transport tickets and mobile coupons all securely in one place. Providing unparalleled convenience for the user, it also enables businesses to add additional services and ultimately increases sales,” continued Ghrous.
“Gemalto leads the way in mobile NFC pilots and commercial roll-outs worldwide, including France, UK, Poland and Singapore. Consumer satisfaction rates amount to 90 per cent, with a demand to make high value payments. This demonstrates the disparity between consumers who have used mobile NFC payments and love it, and others who are understandably concerned about security, due to a lack of experience and knowledge.”

The mobile NFC research results highlight how consumers require more education about the security of mobile NFC payments, which is as secure as other payment systems currently in use. Key features which reinforce the security include:

1) The NFC SIM cards storing consumers’ payment credentials and the payment applications are certified according to security standards defined by financial services authorities and are comparable to chip-and-PIN security.

2) Consumers can choose to authenticate transactions by entering a PIN code on the payment application. Consumers can also request the PIN to be entered for all payments, even for small amounts – providing the end-user with complete control of protection features.

3) Secure over-the-air technology for remote management enables immediate remote blocking of the payment application.
Respondents expressed concern about what would happen if their phone was lost or stolen and many worried that somebody would make large purchases or acquire their bank details. In practice, the payment function can be protected by a personal PIN and should the handset be lost or stolen, the NFC payment issuer or mobile operator, via its Trusted Services Manager (TSM), can immediately lock or even delete the contactless payment application from the handset remotely.

Despite concerns, 35 per cent of respondents were positive about using mobile NFC services if they knew it was completely secure. As with much of Europe, the mobile contactless payments trend is gaining pace in the UK. Once consumers become more aware that their payment credentials are secure, they will become accustomed to the new method of mobile NFC payment and quickly realise the benefits, leading to increased usage.

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