MADISON, Wis. (6/4/14)--Bill payment is the most widely used form of mobile payment today, followed by mobile point-of-sale (POS) and person-to-person payments, according to a new white paper from the Filene Research Institute.
About 39% of online consumers used their mobile phones to make a bill payment, according to the white paper, "Bank Shopper Snapshot Survey Vol. 10: Mobile Payments Tracker II." Another 20% used their mobile phones to make purchases at a store, using POS capabilities provided by retailers.
About 12% used their mobile phone to send someone money. However, mobile P2P adoption is on the rise. P2P payments usage has grown by 69% since the last time the survey was taken nine months ago.
The report is based on 1,695 consumers responding to a Shopper Insight Survey in January.
In the "That's No Surprise" category, mobile POS is most likely used by consumers age 30 to 39 because they have the necessary checking accounts and credit cards and are comfortable with the technology. More than 50% of consumers in the 30-to-39 demographic who made mobile retail purchases in the last 30 days used PayPal.
Coffee and convenience retailers are winning younger consumers by providing their own mobile apps for payment. About 46% of online consumers used these apps.
Younger consumers are more likely to use mobile P2P because they don't have engrained customs on how to exchange money with people, are comfortable using smartphones, typically don't carry much cash, and are most likely to want to exchange small sums of money with people while they're on the go, the paper said.
Older consumers are less likely to pay people with their phone, and that appears to be a function of lifestyle, according to the paper. "Consumers over 40 are more likely to have established households and in a position where owing friends money isn't a concern," the paper said. "Married couples have shared bank accounts and don't exchange small amounts of money as much as younger single consumers do."
Last-minute payments are driving usage of mobile bill payments. Consumers using mobile bill payment services want their payments credited immediately. For that reason, the paper recommends credit unions should offer expedited bill payments to protect their role in the payments cycle.
The ability to give confirmation that the payment was accepted by the biller would also help increase the use of the credit unions mobile app to make payments, the paper said.
Because of this "right here, right now" expectation, consumers are closely tethered to their smartphones. The paper estimates the average smartphone user checks his or her phone more than 150 times a day.
To download the report, use the link.