August 01, 2011 06:00 AM Eastern Daylight Time
NEW YORK--(BUSINESS WIRE)--Sooner or later the U.S. will see widespread adoption of mobile payments, says the experts, but they disagree about how soon and how widespread it will be. Big players in banking and in telephony are investing heavily in developing mobile payment infrastructure. The ultimate object of this feverish activity is consumer adoption, as financial institutions proceed on the assumption that “if we build it, they will come”. However, results of a recent survey by Cardbeat®, a syndicated monthly publication of Auriemma Consulting Group (ACG), suggest that large retailers may have a significant influence on the mobile payments adoption curve.
“Mobile banking, as opposed to mobile payments, is becoming mainstream, keeping pace with the penetration of smartphones”
“Mobile banking, as opposed to mobile payments, is becoming mainstream, keeping pace with the penetration of smartphones,” noted Dr. Patricia Sahm, Managing Director at ACG. Smartphone ownership has jumped from 32% in Q3 2010 to 41% less than a year later, among the 9 out of 10 consumers who have a mobile phone. Just under a third of Cardbeat respondents say they have mobile banking capabilities, and 40% of them have downloaded a banking application within the last 12 months. “Despite the recency of their adoption, users show a fairly high frequency of usage, with half using the app at least once a week,” she said. Also, while informational uses predominate with 79% who use their phone to check their balance, about 4 out of 10 consumers do online bill payment from their phones, paving the way for the transition to mobile payments, she notes.
Security is a concern for almost all users, even the under-35s who are the most positively predisposed toward the concept of mobile payments. Overall, half of consumers say they are very or somewhat uncomfortable with the idea of making purchases with a mobile phone, and their primary concern is security; they also say they have enough payment options and see no need for a new one. At the other end of the scale, one-third of respondents were very or somewhat positive about the concept, and these proponents say mobile payments would save time and money and would be convenient; this group also likes new technology.
Both groups, however, say that the most likely place they would expect to use mobile payments would be in-person at a large retailer. In contrast, only 20% would use it to pay a parking meter. “It’s an interesting finding, because generally with a new payment technology people want to test it out with small purchases first,” Sahm pointed out. “However, both the technophiles and technophobes say they’d feel more comfortable with a large retailer, where the average ticket size is fairly high, rather than the trivial amounts involved with feeding the meter. Large retailers give a sense of security that the consumer would have recourse in case of a problem, and their adoption of mobile payment technology will be a signal to consumers that it’s ok to try it.”
Cardbeat research data was gathered using a web-based survey administered to 502 credit card users in the U.S. during the month of June 2011. The number of interviews completed on a monthly basis is sufficient to allow for statistical significance testing between sub-groups at the 95% confidence level ±5%.
About Auriemma Consulting Group
Auriemma Consulting Group (ACG) is a full-service management consulting firm serving the payments and lending industries since 1984. Cardbeat is ACG’s syndicated market research study of credit card holders, conducted monthly in the U.S. and quarterly in the U.K. ACG also conducts research in the debit and prepaid space, and published a quarterly report known as The Debit Report. With offices in New York and London, ACG consultants are experienced practitioners, drawn from the credit card, private label, auto finance, mortgage, and retail banking industries that we serve.
