More than four in five American smartphone owners are familiar with mobile payment services offered by credit card companies, and just over one in three have used them, according to newly released findings from a survey commissioned by Placecast, one of the only enterprise-grade platforms for monetizing location data on mobile. Conducted online by Harris Poll in November 2014 among over 1,100 U.S. adults who own a smartphone, the survey also showed that smartphone consumers have almost equally used mobile payment services provided by their phone manufacturer, credit card companies, and Internet companies.
Of the smartphone consumers who have used mobile payments, there is no clear frontrunner for which provider will “win” the market. When Placecast compared mobile payments offerings from manufacturers, credit card companies, and Internet companies, the data revealed neck-and-neck competition: 31 percent have used a manufacturer’s mobile payment service, 33 percent have used a credit card company’s service, and 35 percent have used an Internet company’s mobile payment service.
“This indicates that the market is ripe for the taking, and anyone can win the mobile payments race,” said Placecast CEO Alistair Goodman. “Apple, Google, PayPal, Square, Citi, Chase, Samsung – they all have compelling mobile wallet offerings, and any one of them could pull ahead.”
The market potential for mobile wallets is tremendous, which is why so many different companies are vying to become a leader in the space. Given the explosive growth of mobile devices, whoever dominates mobile wallets will essentially dominates commerce, whether the transactions take place online, in-store, via mobile, or a combination of these. However, there are a number of obstacles standing in the way. Until recently, a majority of Americans remained unaware or confused by new payment systems, and many did not see the benefit of paying for something with a phone instead of cash or cards.
The Placecast survey indicates that the tide is beginning to turn. Not only have 4 out of 5 smartphone owners heard of mobile payment services, but also more people are becoming comfortable with using this technology. Placecast found that more than 2 out of 3 smartphone owners (68 percent) find it at least somewhat important to make a purchase online on their smartphone. This finding is in line with a recent InMobi survey that showed that 83 percent of global shoppers who use mobile devices plan to make a mobile purchase in the coming year. By the end of 2017, U.S. mobile users will spend $90 billion via mobile payments, a 48 percent increase over the $12.8 billion spent in
“Consumers are clearly ready for mobile payments,” said Goodman. “People are using their phones to conduct research, get discounts and deals, compare prices, find elusive items, and navigate around stores. We are only a short step away from completing that circle by finishing the actual transaction with a mobile wallet.”
The Alert Shopper Survey #5 also revealed these key findings about mobile payments among cell phone/smartphone owners:
Millennials are a prime demographic: Almost half (47 percent) of Millennials ages 18-34 have used a credit card company’s mobile payments service at least once, and close to two in five (39 percent) use it regularly or occasionally. Nearly half (44 percent) of Millennials have used a manufacturer’s mobile payment service at least once and 35 percent use it regularly or occasionally. Similarly, more than half (51 percent) of Millennials have used an internet company’s mobile payment service at least once and 44 percent use it regularly/occasionally. Males aged 18 to 34 are the strongest users of mobile payment technology.
Men are more likely than women to have heard of and used any of the listed mobile payments services:
- Credit card company mobile payment services: 88 percent of men have ever heard of this versus 73 percent of women; 34 percent of men said they had used a credit card company’s mobile payments service, compared to only 17 percent of women.
- Internet company mobile payment services: 86 percent of men have ever heard of this service versus 70 percent of women; 36 percent of men said they had used an internet company’s mobile payment service, compared to only 18 percent of women.
- Manufacturer’s mobile payment services: 84 percent of men have ever heard of this service versus 67 percent of women; 30 percent of men said they had used a phone manufacturer’s payment service, compared to only 16 percent of women.
Income comes into play: Awareness and usage of mobile payment services is significantly higher amongst those with a household income of $50,000+.
The next challenge? Increase the rates of engagement: Just 12 percent of smartphone owners using a manufacturer’s payment service use it regularly, 17 percent of smartphone owners using a credit card company’s payment service use it regularly, and 17 percent of smartphone owners using an Internet company’s mobile payment service use it regularly. While it appears that slightly more smartphone users regularly use mobile payment services offered by their credit card company or an Internet company – there is no clear “winner” in mobile payments – yet.
Conducted among over 2,000 U.S. adults, this was the fifth survey in Placecast’s Alert Shopper series, one of the longest running research series around how consumers interact with various marketing and purchasing mechanisms. This year’s poll reveals the latest trends in mobile commerce and provides key insights for brands and technology providers on how to engage with the highly-connected consumer in 2015.