Mobile Payments

Mobile Payments Amnesia And CVS’ M-Pay Entrance

When it comes to mobile payments, there are plenty of question marks.

That’s why PYMNTS and InfoScout track those burning questions and more — and we have plenty of news to share in this week’s Mobile Payments Tracker as we continue last week’s delve into the PYMNTS/InfoScout mobile payments adoption data. The data digs into the likes, dislikes and habits of Apple Pay, Android Pay and Samsung Pay mobile payments users. We also look at CVS Pay, a new app that excludes the usual suspects in the mobile payment app space.

The tracker uses tens of thousands of data points from a survey of 4,000 consumers every quarter over the last 18 months. Retailers looked at in the study are capable of enabling an NFC payment and include drug/grocery/QSR and some retail.

What makes a mobile app user choose another method of payment? How keen are users to use mobile payments, and how does time and the convenience of cash factor into the equation?

Which users use their app every chance they get and which users forget that they even have a mobile app? Why do mobile payment users choose another method if they have taken the trouble to load their card data?

Let’s find out.

Who Forgot They Have An App?

First, what makes a mobile app user choose a method of payment other than mobile? For some, it’s simply a matter of forgetfulness. Almost twice as many Apple Pay users (19 percent) versus Android Pay/Samsung Pay mobile payments (10 percent) said that they forgot to use their mobile devices, and this was an Apple Pay user’s top reason for not paying with their app.

For others, it’s an issue of time and the convenience of cash. Almost twice as many Android and Samsung Pay users like to use cash, and close to twice as many Android Pay and Samsung Pay users claimed that mobile payments take too long. This was the top reason for not paying with a mobile app for Android Pay and Samsung Pay users, but Apple Pay users’ top reason was they didn’t know if the store accepted Apple Pay.

Rewards were a significant incentive as far as payment method is concerned. It was sixth on the list of reasons for not paying with a mobile app for Android Pay and Samsung Pay users, and third on the list for Apple Pay users.

In the span of a week, almost 50 percent of Apple Pay users had not used their app, versus only 1.3 percent of Android and Samsung Pay users, which implies a much better user retention rate for Android and Samsung Pay.

Android and Samsung Pay Users For Debit, Apple for Credit
There is a difference in the choice of debit or credit card as a funding source among users. A slight majority (56 percent) of Android Pay and Samsung Pay mobile users use a debit card for their mobile payments app while 42 percent use a credit card. Meanwhile, only 44 percent of Apple Pay users prefer to use a debit card as a funding source and 50 percent use a credit card.

Which users are more enthusiastic toward their mobile payment method? Forty-four percent of Android and Samsung Pay users say that they use that method every chance they get. Only 21 percent of Apple Pay users stated the same, but then 42 percent also stated that they use Apple Pay whenever they remember that they can do so, and they do have a tendency to forget.

Waning interest in Apple Pay also seems to be borne out by the significant number (34 percent) of Apple Pay respondents who said that they rarely consider using mobile payments, but only 9 percent of Android and Samsung Pay users said the same. And, interestingly, more Apple Pay users (over 3 percent) say that they have stopped trying to use mobile payments, compared to close to 1 percent of Android and Samsung Pay users.

CVS Brings New App At Lightning Speed

But alas, a new player has entered the ring.

CVS has turned its back on the current offerings and decided to chart the course alone with its rollout of CVS Pay.

Although the company doesn’t support Apple Pay, its competitors or NFC-based technologies currently, it is not counting them out forever. The retail pharmacy’s proprietary app will integrate payments, prescription health pickup and its rewards for Android or iOS mobile device users.

Brian Tilzer, CVS’ senior vice president and chief digital officer, told PYMNTS that CVS Health is dedicated to making health care “convenient, personal and affordable,” and the company views the mobile device as essential to delivering this experience.

With the CVS app, customers will have the ability to refill, manage multiple prescriptions and get alerts when ready, as well as pick up and pay using a single barcode.

The current CVS payment process is somewhat clunky because customers must present their CVS rewards card at the register and then either swipe or use a chip card, all of which takes time. The app eliminates all that. However, some think that consumers are weary of having to download yet another app. Walgreens is CVS’ largest competitor, and it uses a rewards card through the Wallet app for iOS and offers Apple Pay for payments.

What is most interesting, however, is CVS’ capacity to quickly create CVS Pay. According to TechCrunch, CVS has only been looking at payments for the past three to four months. With CVS’ Boston-based innovation lab working to push CVS in the direction of a cutting-edge health care company, there may be a lot more technology to come – and soon.

CVS Pay is currently available in New York, New Jersey, Pennsylvania and Delaware, and will be nationwide later in 2016. Tilzer says that the brand is “excited” by the rate of consumer adoption observed so far. But will the new contender be able to find a place in consumers’ payments habits? Only time will tell — and PYMNTS will be sure to share all the juicy details as they emerge.

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Latest Insights:

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The September 2019 AML/KYC Tracker Report provides an in-depth examination of current efforts to stop money laundering, fight fraud and improve customer identity authentication in the financial services space.

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