Adoption overseas is being driven by the lack of banking infrastructure such as ATMs and bank branches and by the lack of alternatives such as cash or check products in emerging markets such as Africa, Southeast Asia and the Caribbean Islands. “In the U.S., we have a highly developed and mature payment ecosystem that offers consumers abundant choices for making payments, which is something many emerging markets don’t have,” said James Van Dyke, President and Founder of Javelin. “If financial institutions want to be consumers’ first choice for banking and payments via mobile devices, they will need to develop a strategy for addressing the growing P2P mobile money market.”
Mobile person-to-person payments have been available for more than ten years in the U.S., tracing their roots back to PayPal’s arrival in 1998. However, despite significant advances in handset technology, mobile network connectivity and improved experiences for users on handsets, broad-based consumer adoption of mobile P2P payments in the U.S. remains low.
Selected Key Report Findings Person-to-Person Mobile Money Transfers
- Smartphone owners and consumers between the ages of 18 and 34 are both the most active users of mobile banking and are prime targets for mobile P2P use.
- Almost four in every ten mobile bankers used mobile P2P transfers in the past twelve months.
- Most consumers who use mobile P2P payments do so for domestic transfers and not for international remittances, with the majority of mobile P2P transactions initiated in the U.S. in the $10 to $50 value range.
- In addition to limited service availability, which is changing dramatically this year and will continue to do so for the next several years, consumer awareness and security concerns are the top barriers to U.S. consumer adoption of mobile P2P payments.
“Until now, no dominant P2P mobile payments player has surfaced in the U.S. By not implementing mobile P2P and other mobile payment services, FIs have left a strategic gap in their product offerings that has been and could continue to be filled by non‐FI third parties,” said Beth Robertson, Director of Payments Research at Javelin. “As large FIs begin offering mobile P2P, these bank-centric services will act as a strategic counterbalance, potentially providing the market with the momentum it is currently lacking to help propel mobile P2P payments out of its current niche status and into the mainstream.”
Javelin’s Person-to-Person Mobile Money Transfers report discusses the primary models offered in the mobile P2P marketplace, analyzes U.S. consumer usage, barriers to adoption and suggested approaches to circumventing these barriers, and reviews 14 mobile P2P payment vendors and FIs. The report is based on data collected online from two random-sample survey panels, including 3,100 respondents with mobile phones in July 2010 and 5,211 households representative of the U.S. online population in March 2010.
About Javelin Strategy & Research
Javelin provides superior direction on key facts and forces that materially determine the success of customer-facing financial services, payments and security initiatives. Our advantages are rigorous process, independent position and expert people. For more information about this or other Javelin reports, please visitwww.javelinstrategy.com/research or contact Liz Travers at (925) 225-9100 ext. 31 or etravers@javelinstrategy.com.
Source: Company press release.
