Studies from Nielsen, PayPal, and the Federal Reserve Bank show the increasing number of people who make mobile payments and the various ways in which they do so.
Forty percent of people who make payments with their smartphones are more likely to use their Google Wallet than their actual wallet, according to Nielsen’s Q2 2014 Mobile Wallet Report.
The study — which surveyed 3,784 people who had used their smartphones or tablets for shopping, banking, or making payments in the previous month — found that using mobile payment services such as PayPal, Google Wallet, and MasterCard PayPass isn’t specific to any one demographic.
At 47 and 53 percent, respectively, men and women are almost equal users, while the highest usage of mobile payments occurs at income levels below $50,000 (32 percent) and higher than $100,000 (29 percent). More than half of the people who pay with their phones belong to the 18-34 demographic, though 35 percent of users are between the ages of 35 and 54.
The ways in which people pay with their smartphones include scanable barcodes and quick-response codes, tapping them on payment readers using near-field communication, and peer-to-peer payment apps, which are particularly popular at restaurants. Nielsen found that 73 percent of users like the convenience of not having to split the bill or go find an ATM.
One thing is for sure, digital connectivity is most certainly having a large impact on our daily routines. But while only 40 percent of mobile wallet users are utilizing them as their primary form of payment, how can marketers convert the remaining 60 percent?
Sixty-nine percent of consumers agreed that they’d convert to mobile payment methods if merchants were to offer discounts specific to purchases made via mobile wallet. Another 69 percent felt that if reward programs that they are currently enrolled in would honor mobile transactions, or programs and mobile wallets could be integrated to redeem points immediately, then this would influence their decision to convert.
"Nothing should stand in the way of people and what they want, especially not unneeded processes or old-fashioned technology," says Pablo Rodriguez, head of consumer public relations at PayPal. "Because so many shoppers are used to one-touch payment and the instant gratification that results, anything less loses their attention and ultimately, their dollars."
Last week, PayPal, which has apps for both consumers and businesses to make and receive payments, announced findings from a survey in which more than 15,000 adults in 15 countries shared their feelings on mobile payments.
The study found that for those who choose not to make mobile payments, security is the primary reason. However, that’s not as much of an issue in the United States, where 46 percent of respondents expressed discomfort with sharing data online, as opposed to the 57 percent global average. Only Italians were less concerned with their details being stolen.
"The study shows how accustomed Americans have grown to the layers of security and buyer protection companies like PayPal and others have built into the e-commerce experience, and how comfortable they feel as a result," Rodriguez says.
While some remain hesitant, the number of people who pay with their smartphones continues to grow. According to the Federal Reserve Bank’s annual "Consumers and Mobile Financial Services" study, 33 percent of American adults do online banking, while 17 percent have used their phones to make a point-of-sale payment. These figures are up from 28 and 6 percent, respectively, the previous year.
"This statistic confirms for businesses that figuring out mobile payments is key to future sales," Rodriguez says.
Want to learn more?
Attend ClickZ Live New York March 30 - April 1. With over 15 years' experience delivering industry-leading events, ClickZ Live brings together over 60 expert speakers to offer an action-packed, educationally-focused agenda covering all aspects of digital marketing. Register today!
Before joining the ClickZ team, Mike O'Brien was a reporter for newspapers in Brooklyn and Eugene, Oregon, where he earned a Master's degree in journalism from the University of Oregon. Having also worked in newspaper sales, Mike enjoys writing about marketing and advertising much more than selling it.
Singapore, 5-6 March
Bangkok, 17-18 March
Hong Kong, April 2015
A Buyer's Guide to Affiliate Management Software
Manage your performance marketing with the right solution. Choose a platform that will mutually empower advertisers and media partners!
Google My Business Listings Demystified
To help brands control how they appear online, Google has developed a new offering: Google My Business Locations. This whitepaper helps marketers understand how to use this powerful new tool.
March 3, 2015
1:00pm ET/10:00am PT