Young consumers are most skeptical about NFC security

Decades of hearing "don't leave home without it" may have convinced American consumers that they won't be replacing their wallets with smartphones anytime soon. A Radius Global Market Research survey found that concerns about fraud, security and network stability hinder electronics manufacturers' ambitions to process credit card transactions with near-field-communications devices.

Conventional wisdom suggests that a growing number of younger Americans may want to carry a single mobile device, capable of initiating merchant payments with most of their active credit card accounts. However, according to Radius spokesman Chip Lister, the next generation of active consumers has already raised the most critical concerns about NFC-based mobile payments solutions.

Security concerns influence resistance to NFC payments

In a statement to reporters, Lister revealed that half of the American consumers represented in the Radius survey admitted that their security fears influenced whether they intended to use smartphone payment solutions in the future. That percentage rises when researchers narrow their sample to just those respondents under the age of 35. When Radius asked only those under-35 consumers who self-identified as "digitally savvy," the percentage of resistance rose to 62 percent.

Too many cooks in the kitchen, consumers say

NFC payment trials rely on partnerships between software developers, handset makers, banks, wireless networks and retailers. For instance, a typical Google Wallet payment requires a smartphone from Motorola or Samsung, connected to a Citibank credit card or debit card account, processed over MasterCard's network, on point-of-sale hardware designed by yet another manufacturer.

Compared to swiping a traditional credit card, a wireless transaction appears even more risky to many of the survey's respondents. "Consumers appear to be very aware of the entire delivery chain associated with mobile payments," said Lister. "In consumers' minds the complete transaction is only as strong as the weakest link, especially as it relates to security." Survey respondents suggested that trusted technology vendors could inspire more NFC transactions by leading marketing efforts, instead of diluting their involvement as members of a coalition.