Mobile Payments … Same Old, Same Old
The payments and banking industries are making progress in getting more U.S. consumers to use their mobile devices to access bank and card-account information, a new Federal Reserve Board of Governors report released March 25 shows.
As of December last year, 33 percent of all mobile phone users and 51 percent of smartphone users had used mobile banking in the previous 12 months. This is an increase from 28 percent in December 2012 for mobile phone users and 48 percent for smartphone users, according to Fed’s report “Consumers and Mobile Financial Services 2014. Online consumer-research company GfK conducted the survey using a sample of adults ages 18 and older from KnowledgePanel, a proprietary, probability-based Web panel of more than 50,000 individuals from sampled households.
The use of mobile phones to make payments at the point-of-sale also has experienced substantial growth, increasing threefold between the 2011 and 2012 surveys, and again between 2012 and 2013, according to the Fed. In 2013, 17 percent of smartphone owners, representing 9 percent of the U.S. adult population, reported having used their phone to make a purchase at a retail store in the past 12 months, the 61-page report notes.
Helping drive much of this activity is simply the increasing percentage of consumers who have mobile phones. Some 87 percent of the U.S. adult population has a mobile phone, and 61 percent of mobile phones are Internet-enabled smartphones, according to the Fed.
Among those consumers who had used their phones to shop at the point of sale, 39 percent did so by scanning a barcode or QR code displayed on their phone’s screen at the cash register, while 14 percent waved or tapped their mobile phone at the register, the report noted.
Consumers increasingly are using mobile phones to help make decisions while shopping. Among smartphone owners, 44 percent had used their phone to compare prices while shopping, and 42 percent had used their phones to browse product reviews in store. More than two-thirds of those who had used their phone to do price comparisons had changed where they made their purchase based on that information, according to the report.
The Federal Reserve Board completed its first “Survey of Consumers’ Use of Mobile Financial Services” in December 2011, and it released a summary report in March 2012. The board has continued to conduct the survey and release a report annually to monitor trends in the use of mobile financial services, and to understand how the rapidly expanding use of this technology affects consumer decision-making and the overall economy.
The board’s report looks at how consumers access their bank’s services using mobile phones (“mobile banking”), at their payment for goods and services using mobile phones (“mobile payments”), as well as their use of mobile phones to inform their shopping decisions.
The most common mobile banking activities continue to be reviewing account balances, monitoring recent transactions, or transferring money between accounts. The use of mobile phones to deposit checks by taking pictures of them using the phone’s camera again increased substantially between surveys, with 38 percent of mobile banking users having deposited a check with their phone in 2013, according to the Fed.
The use of mobile financial services is particularly prevalent among the 17 percent of the population that is underbanked (consumers with bank accounts but who also use check cashers, payday lenders, auto title loans, pawn shops, or payroll cards).
Among the 88 percent of underbanked consumers with mobile phones, 39 percent had used mobile banking in 2013. Mobile phones also may allow for the extension of financial services to an additional 10 percent of the population that is unbanked (those without a bank account), as 69 percent of this group has a mobile phone, 64 percent of which are smartphones, the Fed said.
While the use of mobile banking continues to increase, the report indicates that those consumers who do not use mobile banking are becoming more skeptical of the benefit of mobile banking and the level of security associated with the technology.
Well more than half of mobile-phone owners who do not currently use mobile banking say they have no interest in using this technology. Consumers are similarly skeptical of the benefits and security of mobile POS payments, or they believe it is simply easier to use another method of payment. Almost three-quarters of all mobile-phone owners said that they were “unlikely” or “very unlikely” to use their mobile phones to buy things at the point-of-sale if given the option.
For a copy of the full report, click here.