Page 21 - Consumers and Mobile Financial Services 2014

March 2014 13

phone bill. The type of payment used to fund the Table 4. Use of mobile payments in the past 12 months
mobile purchase has implications for the consumer by age
protections the payer is afforded on the transaction,
Percent, except as noted
as different payment sources are covered by different
5
consumer regulations and regulatory agencies. (See Age categories No Yes Total
box 3 for a discussion of mobile wallets and con-
18–29 18.9 35.7 21.8
sumer protections.) 30–44 25.3 32.6 26.6
45–59 28.6 21.4 27.4
Overall, using mobile phones to make retail pur- 60+ 27.2 10.4 24.3
Number of respondents 1,956 372 2,328
chases has become much more commonplace. In
2013, 17 percent of all smartphone users made POS
purchases with their mobile phone in the past
12 months. This represents a near tripling in the inci- and 1 percent or less having used Isis, Tabbedout, or
dence of POS mobile payments among smartphone Dwolla. 7
users from the 6 percent rate found in the 2012 sur-
vey. However, among those who have made a POS There continues to be only modest interest in the use
mobile payment in the past 12 months, only 43 per- of mobile phones to pay for purchases in a store
cent had done so in the preceding month, and less among the broader mobile phone user population.
than a quarter had made more than two such Less than a quarter of all mobile phone users say
payments. that they already make POS mobile payments (2 per-
cent), or are “likely” (15 percent) or “very likely”
Scanning a QR code displayed on a mobile phone is (6 percent) to use mobile POS payments if offered
the most common method that consumers use to the opportunity. Almost half of mobile phone users
make mobile payments at the point-of-sale, and it is (44 percent) say that they are “very unlikely” to use
used by 39 percent of those who made mobile POS mobile POS payments.
payments. This is followed by 18 percent who made a
payment using a mobile app that doesn’t require Mobile payments broadly defined are disproportion-
scanning a barcode or tapping their device, and ately used by younger consumers (table 4). Individu-
14 percent of mobile payment users that made a pay- als ages 18 to 29 account for 36 percent of mobile
ment by waving or tapping their mobile phone at the payment users, relative to 22 percent of all mobile
POS terminal. Thus, despite the increasing availabil- phone users, while individuals ages 30 to 44 account
ity of phones equipped with near field communica- for a further 33 percent of mobile payment users,
tion (NFC) chips, it appears that non-NFC-based relative to 27 percent of all mobile phone users.
mobile payment services currently dominate the mar- Those ages 45 to 59 account for 27 percent of all
6
ket. This prevalence of non-NFC payment services mobile phone users, but only 21 percent of mobile
is highlighted by the reported usage of several differ- payment users. Those ages 60 and above make up
ent services by those making mobile POS payments, another 24 percent of mobile phone users, but
with 14 percent having used Starbucks mobile pay- account for only 10 percent of mobile payment users.
ments in the past 12 months, 11 percent having used
PayPal In-Store Payment, 7 percent having used Conditional on owning a mobile phone, minorities
Google Wallet, 5 percent having used Square Wallet, are disproportionally likely to adopt mobile pay-
ments. Non-Hispanic whites account for 49 percent
of mobile payment users but make up 68 percent of
5
For further details on how existing consumer regulations relate mobile phone users (table 5). Hispanics account for
to the various methods for making mobile payments, see
Stephanie Martin (2012), “Statement before the Committee on 22 percent of all mobile payment users relative to
Financial Services Subcommittee on Financial Institutions and 14 percent of all mobile phone users, and 21 percent
Consumer Credit U.S. House of Representatives” (Washington: of mobile payment users are non-Hispanic black
Federal Reserve Board, June), www.federalreserve.gov/
newsevents/testimony/martin20120629a.pdf. compared to their 11 percent share of the mobile
6 phone user population.
NFC (near field communication) is wireless communication
technology that allows data to be exchanged between devices
that are a few centimeters apart. NFC-enabled mobile phones
incorporate a smart chip (called a secure element) that allows
the phone to store the payment application and consumer
account information securely and use the information as a vir- 7 Isis was only available in Austin, Texas, and Salt Lake City,
tual payment card. Utah, until launching nationally in November 2013.