Page 17 - Consumers and Mobile Financial Services 2014

March 2014 9

Box 2. Alternatives to Traditional Banking and Financial
Services—continued

Payday Loans
Only 6 percent of respondents report having used a According to respondents, the main reasons for
payday loan, paycheck advance, or deposit advance using payday loans or advances instead of other,
service in the past 12 months. As shown in figure A, more traditional financial services are perceptions
respondents report that these payday loans or pay- that the borrower didn’t think they would qualify for a
check advances were used primarily for daily essen- bank loan or credit card (28 percent), that the loca-
tials such as utility bills (53 percent); for food, gro- tion of the payday lender was more convenient
ceries, and other living expenses (51 percent); for (19 percent), that the payday loan was quicker to
emergency expenses (39 percent); for rent or mort- get than a bank loan or credit card advance (19 per-
gage payments (38 percent); or for miscellaneous cent), and it would be easier to get a payday loan
bills (37 percent). Almost one in four respondents than to qualify for a bank loan or credit card (15 per-
deposited the money from the payday loan into their cent). One in ten borrowers used a payday loan
bank account in order to avoid overdraft charges. because they didn’t think that banks made loans for
The median payday loan borrower took out two small amounts of money, and only 3 percent felt
loans in the past 12 months, while the average num- more comfortable going through a payday lender
ber of payday loans among borrowers was four. than using a bank, as shown in figure B.

Figure B. Main reason for using a payday loan or advance service over a bank loan or credit card

I didn't think I would qualify 28%
The location of the payday lender was more convenient 19%
The payday loan was quicker 19%
It was easier to get a payday loan 15%
Banks don't make loans for small amounts of money 11%
Refused to answer 4%
More comfortable with the payday lender than a bank 3%
Other 2%
I didn't want the loan to show up on my credit report 0%

that don’t have Internet access) used mobile banking. ages 60 and over account for only 7 percent of all
In both the panel and cross-sectional data, smart- mobile banking users, but represent 25 percent of all
phone users are more likely to adopt mobile banking mobile phone users. In 2012, those ages 18 to 29
than non-smartphone users.

Use of mobile banking continues to be highly corre- Table 2. Use of mobile banking in the past 12 months
lated with age (table 2). In the 2013 survey, individu- by age
als between ages 18 and 29 account for approximately Percent, except as noted
39 percent of mobile banking users, relative to
21 percent of mobile phone users overall. The next Age categories No Yes Total
age group (30 to 44) accounts for 34 percent of 18–29 11.4 39.1 20.6
mobile banking users, relative to 26 percent of 30–44 22.3 33.7 26.1
mobile phone users overall. Those ages 45 to 59 45–59 31.7 20.7 28.1
account for 21 percent of mobile bankers, relative to 60+ 34.5 6.6 25.2
Number of respondents 1,540 640 2,180
28 percent of mobile phone users. Finally, individuals

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