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Mobile payments must be relevant, useful, study confirms

Young adults are especially interested in wearable mobile technologies that they can use for banking and making payments.

September 5, 2014

Consumers are expressing growing interest in a wide variety of mobile payments as they begin to use mobile banking, and as more retailers provide mobile apps for payments. Indeed, this year 43 percent have tried mobile payments, compared with 31 percent in 2013. 

Moreover, 38 percent of U.S. adults — especially young adults (62 percent) — are interested in wearable technology with a mobile interface that enables activities such as making payments or mobile banking.

When asked to rate the importance of 11 features that might be featured on a wearable mobile device, 50 percent of those interested in the technology said it is important to include both mobile banking and mobile payments capability.

These findings come from an Insight Report, "Mobile Payments: Only If Relevant and Useful," based on data from the CustomerMonitor Survey series by Mercator Advisory Group.

This study examines:

• the changing profile of Web-enabled mobile users;
• consumer use, interest, and satisfaction with mobile devices for payment — in terms of payment acceptance, and making payments in-store and online;
• use and brands of mobile-based card readers for money transfer services;
• use, interest and important features of new technologies such as wearable technology for payments;
• related payment features including e-couponing, e-receipting, e-loyalty, and payment, balance, and fraud alerts. 

"Now that most U.S. consumers own a smartphone and mobile ownership keeps rising, more consumers have tried mobile payments at online retailers and even in stores at checkout, thanks mostly to retailers' mobile payment apps like Starbucks and others," said Karen Augustine, author of the report and manager of Primary Data Services at Mercator Advisory Group.

"Timely and useful e-coupons, discounts, and loyalty rewards and even e-receipt management stimulates mobile payment use. Consumer enthusiasm for new wearable technology demonstrates that consumers want to use mobile payments but only if it's easy to use and embedded with other relevant functionality."

Highlights of the report include:

• year-over-year trends in smartphone and tablet ownership by screen size;
• year-over-year trends in use of, and interest in, various methods of in-store and online mobile payments and mobile payment acceptance methods;
• demographics of mobile users and mobile payment users, and an assessment of their satisfaction with the operability of mobile phones;
• challenges to mobile payment adoption, and confidence in security and reliability;
• use of passwords or other types of security codes on smartphones and tablets;
• shifts in use and delivery methods for six types of financial alerts;
• shifts in use and interest in e-couponing, e-receipting, and apps for coupon and receipt storage and management; and
• use, interest, format, and importance of features for wearable technology capable of payments, mobile banking, and money transfers.

One of 30 exhibits in the 65-page report:

The report is based on responses from an online panel of 3,002 U.S. adult consumers surveyed in June.