Page 16 - Consumers and Mobile Financial Services 2014
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8 Consumers and Mobile Financial Services 2014






Box 2. Alternatives to Traditional Banking and Financial Services
As in its previous surveys, the Board’s 2013 survey Prepaid Cards
included questions regarding consumers’ usage and
attitudes toward alternative financial services, such Prepaid cards have remained the most-used alterna-
as payday loans and prepaid cards. tive financial service over the past several years.
The share of respondents who report using a gen-
Products such as payday loans and reloadable pre- eral purpose card was 15 percent in 2013, while
paid cards are becoming increasingly used, as 8 percent use a government-provided card, and
people look outside mainstream financial products to 3 percent use a payroll card. Just over one-fifth
meet their financial needs. However, these alterna- (22 percent) of all consumers surveyed use some
tives to traditional banking may have relatively high type of prepaid card.
interest rates and service charges or fees, which
can vary widely depending on the specific product Some general purpose prepaid cards can be
used. This can make alternative financial services a reloaded with money and used as an alternative to a
costly way of managing household finances if not checking account. Among respondents with general
used carefully. Moreover, consumers may have purpose prepaid cards, 38 percent report that it is
fewer regulatory protections on some non-traditional reloadable, and of those with reloadable cards,
financial services when problems arise. 50 percent added money to their cards in the previ-
ous month.

Figure A. Uses of money from most recent payday loan

Paying utility bills (phone, power, gas) 53%
Buying food, groceries, or other living expenses 51%
Paying for an emergency expense 39%
Paying rent or mortgage 38%
Paying miscellaneous bills 37%
Deposited to avoid overdraft charge(s) 24%
Other 5%


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Although previous surveys suggest that the reported phone users) reported being mobile banking users in
adoption intentions of the respondents do not per- 2013. However, 19 percent of those who were mobile
fectly reflect subsequent behavior, there is a strong banking users in 2012 (3 percent of all mobile phone
correlation between the planned use of mobile bank- users) reported that they had not used mobile bank-
ing and subsequent adoption. Using the panel of ing in 2013. Among panel respondents, mobile bank-
respondents to both the 2012 and 2013 Board sur- ing usage increased from 27 percent in 2012 to
veys, it is possible to compare the reported mobile 33 percent in 2013.
banking adoption intention over the next 12 months
from the 2012 survey to the reported use of mobile The 2012 survey included a group of respondents
banking in the 2013 survey. Of those consumers who who indicated that they would “definitely” or “prob-
reported in 2012 that they will “definitely” or “prob- ably” adopt mobile banking in the coming year. For
ably” adopt mobile banking in the next 12 months, that group of respondents who believed they were
37 percent had adopted mobile banking one year “likely” to adopt mobile banking, the most signifi-
later. Conversely, for those who indicated that they cant difference between those who actually did adopt
“probably will not” and “definitely will not” adopt mobile banking by the 2013 survey and those who
mobile banking, 19 percent and 5 percent, respec- did not was that the adopters were more likely to
tively, had adopted mobile banking in 2013. In total, own a smartphone. Of this likely-to-adopt group,
14 percent of those who reported that they were not 40 percent with smartphones used mobile banking,
mobile banking users in 2012 (7 percent of all mobile while none of the people with feature phones (phones
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