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Grow Your Business Finances

Mobile Payments: Why Most Shoppers Just Say No

Mobile Payments: Why Most Shoppers Just Say No
Credit: Denys Prykhodov/Shutterstock

Although it may seem like consumers use their smartphones and tablets for everything these days, there's one thing many of them won't do on the go: make payments.

In fact, 48 percent of consumers surveyed said they have not used their mobile phones to make a purchase, according to a new study from digital commerce solutions provider Avangate. But why do so many consumers avoid making mobile payments and purchases? Forty percent of the consumers surveyed said they don't want to store critical or sensitive information on their phones.

And even the consumers who do make mobile purchases don't always feel safe doing so. Twenty-two percent said they don't feel secure when making mobile payments but do it anyway.

But despite their worries about mobile payments, most consumers actually prefer to go paperless. Ninety percent of those surveyed said they no longer prefer paying bills by paper check.

So how can businesses make consumers more comfortable with online payments? The key is in long-term subscriptions. [26 Ways to Accept Mobile Payments]

Sixty percent of consumers said they have set up at least one to two recurring online payments, and 71 percent said they want recurring subscriptions without monthly reminders.

In addition, offering subscriptions with special features can seal the deal. Forty-six percent of buyers said they refuse to purchase online subscriptions without a "freemium" option (where the main product or service itself is free, but customers can pay for additional functionality or features), and 25 percent said they're more willing to purchase an online service subscription when add-on features are available.

"Today, we are seeing the digitization of products into services — what we are calling the 'New Services Economy' — and it's spawning the next generation of software and online services companies that are redefining commerce," said Carl Theobald, CEO at Avangate.

"For these new service providers and vendors, the ability to truly monetize their offerings is no longer about point payment transactions with the customer, but rather being able to interact, service and expand the relationship with the customer from the discovery, trial and add-on and retention phases, all of which are potential opportunities to make purchasing decisions," he added.

Originally published on Business News Daily.

Brittney Helmrich
Brittney Helmrich

Brittney M. Helmrich graduated from Drew University in 2012 with a B.A. in History and Creative Writing. She joined the Business News Daily team in 2014 after working as the editor-in-chief of an online college life and advice publication for two years. Follow Brittney on Twitter at @brittneyplz, or contact her by email.