Tag Archive for: Mobile payments
(New York, NY) Mobile payments give cardholders the chance to lighten their physical wallet, but those in states like Arizona and Maryland may be able to go without a wallet altogether. In March, Apple announced that Arizona would be the first state to offer its locals the opportunity to digitally store their driver’s license or state ID in the Apple Wallet, and Maryland soon followed. But what impact, if any, will this have on mobile payment usage overall?
Auriemma Group’s latest Mobile Pay Tracker study found that ID provisioning could increase mobile payment usage notably. According to the research, 67% of mobile payment users and 20% of non-users would be interested in adding an ID to their mobile wallet. And nearly half of those interested say having an ID available in their mobile pay wallet would make them use it more. This is particularly striking among non-users, 45% of whom would begin using mobile payments as a result.
“With the addition of IDs, mobile wallets take one step closer to being a physical wallet substitute,” says Jaclyn Holmes, Director of Research at Auriemma Group. “Though we don’t anticipate mobile wallets to fully replace physical ones, this addition will make leaving home without one a greater possibility should your state provide the option.”
However, mobile payments have some work to do if they want to convert naysayers. 62% of those uninterested in adding an ID to their mobile wallet say they don’t like the idea of having all their personal information saved to one device, and 50% don’t think it would be secure. Over half of these cardholders also don’t trust mobile wallets enough to leave their physical ID at home, saying they would still carry it with them anyway.
When looking at those interested in adding their ID to a mobile wallet, however, 69% are comfortable leaving their physical ID behind. This is most prominent among younger cardholders, suggesting that over time comfort may increase.
“Mobile payments already allow consumers to add their payment cards, plane tickets, membership cards, and more,” says Holmes. “Adding IDs is the next logical step and is likely to promote mobile payment usage overall. As issuers consider their relationship to mobile payments, it would be worthwhile for them to envision a future where digital wallets are more commonplace, even if only supplemental to the physical wallet.”
Survey Methodology
Mobile Pay Tracker
This Auriemma Group study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) in July 2022 among 2,182 adult mobile pay eligible credit cardholders. The number of interviews completed for both is sufficient to allow for statistical significance testing among sub-groups at the 95% confidence level ±5%, unless otherwise noted. The purpose of the research was not disclosed, nor did respondents know the criteria for qualifying.
Though users of Click to Pay tend to use the service more than once, PayPal continues to be the preferred pay button. PayPal has a slight edge over Click to Pay among Click to Pay users, but non-users express a strong preference for PayPal.
Much like contactless card usage, Mobile Pay adoption grew in 2020. According to Auriemma’s Wave 3 issue of Mobile Pay Tracker, 40% of those eligible to use mobile payments report doing so, level with the all-time peak reported in W2-20.
(New York, NY) COVID-19 changed consumer purchasing behavior in the short-term, but will changes be long-lasting or temporary? It is a question often asked within the payments industry, and one that Auriemma Group’s research has been asking consumers for months. Auriemma’s latest Mobile Pay Tracker study (fielded April-May 2020) uncovered that the answer may be a little bit of both—purchase frequency could level, but preferred methods, channels, and services may shift to create a new normal going forward.
1. Shopping habits will likely level out, but methods may change
In the early days of COVID-19 consumer spend was reoriented to household purchases (e.g., food, cleaning supplies). While specific categories of purchases saw notable spikes, spend overall declined. Auriemma’s research found that in April and May two-thirds (65%) of cardholders said they were spending less over the past 30 days than they would have before COVID-19. When asked about the next 30 days, however, this figure drops to 44%, and a similar proportion (42%) expect their spend to return to pre-COVID-19 levels by that point.
Although spend may return to normal, there may be a new normal for how consumers make payments. More consumers are trialing contactless and mobile payments than ever before, and some are shifting their purchase channel preferences. For example, consumers have historically preferred in-store shopping for groceries, and while most still do, a notable 31% now say they prefer using digital channels (i.e., websites, mobile apps) to make grocery purchases.
“COVID-19 has given consumers strong incentive to try new payment methods and purchase channels,” says Jaclyn Holmes, Director of Research at Auriemma Group. “The disruption it has caused may be the catalyst that propels more innovative shopping and payment experiences moving forward.”
2. COVID-19 has not only changed how consumers shop, but also where
Staple household items were in high-demand at the start of COVID-19, and the need for those items trumped merchant and brand loyalty. Many consumers said stores they regularly shop at were out of many items (76%), that they needed to switch from their preferred brand to purchase an item they needed (67%), and that they have visited stores they don’t normally shop at to find what they need (35%).
This sentiment extends to the online shopping experience, with 40% of those shoppers saying they have tried shopping with new merchants or websites since the COVID-19 outbreak. Overall, COVID-19 has motivated consumers to try different merchants, items, and experiences. Nearly two-thirds (64%) of consumers say they are willing to try new ways to shop, including using apps and curbside pick-up.
“Brand loyalty is often a strong purchase motivator, both when purchasing products and selecting a merchant,” says Holmes. “In recent months, many consumers have tried new merchants and products out of necessity. While some will understandably revert back to their preferred brands, some have expressed they’ve been pleasantly surprised by these alternatives and will continue to utilize or purchase from them looking ahead..”
3. Some industries and products will thrive, while others will struggle
With consumers staying and/or working from home, there were many services that gained popularity. Unsurprisingly, consumers reported increased usage of video chat platforms, online food delivery, and online workouts. At the same time, however, cardholders report a notable decrease in usage of deal/discount services or apps.
Groupon has been hit particularly hard—in February, the company announced they were shifting their focus away from products and back to experiences. The timing was unfortunate, given that just a month later consumer spend shifted away from in-person experiences because of COVID-19. By March, the company reported decreased demand for their offerings and significant increases in refund levels.
4. Consumers aiming to support local businesses may skip third-party apps
Third-party apps like Groupon and Seamless may also see decreases in usage among those aiming to support local businesses. 31% of consumers have donated money to local businesses and 24% have purchased gift cards to support their local businesses during this time.
Additionally, consumer awareness for hidden fees and commissions are driving some to purchase directly from the end merchant. Auriemma’s research identified that some consumers avoid using food ordering or delivery apps to better support local businesses. One 33-year-old male said:
“We’ve been bothered by the commission the food delivery apps are making so we are making a conscious effort to order directly from the restaurant. It had crossed my mind prior to the outbreak but now, it is more top of mind.”
COVID-19’s Overall Impact
COVID-19 will create some long-lasting impacts on consumer behavior, but some behaviors will return to normal. While overall spending is expected to lift as people get back to work and regain confidence in the economy, where they spend their money, what they spend money on, and the methods they use to make purchases may change. Issuers may see further increases in contactless payments and digital spend, as in-person purchasing (particularly via swiping or dipping) remains low.
“Now more than ever consumer behaviors and attitudes are in a state of flux,” says Holmes. “Our continued research into the impact of COVID-19 will give us a forward look into these shifts and provide a roadmap for future expectations.”
Survey Methodology
This Auriemma Group study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) in April/May 2020 among 2,022 adult Apple, Google, or Samsung Pay eligible credit cardholders. The number of interviews completed for both is sufficient to allow for statistical significance testing among sub-groups at the 95% confidence level ±5%, unless otherwise noted. The purpose of the research was not disclosed, nor did respondents know the criteria for qualifying. The average interview length was 27 minutes.
Additionally, ten in-depth interviews (IDIs) were conducted in May 2020 via telephone. All were recruited from the quantitative web survey from parts of the country that had seen at least some impact (either business closures or social distancing rules). The goal was to understand the impact of the COVID-19 epidemic on shopping behaviors and attitudes.
About Auriemma Group
For more than 30 years, Auriemma’s mission has been to empower clients with authoritative data and actionable insights. Our team comprises recognized experts in four primary areas: operational effectiveness, consumer research, co-brand partnerships, and corporate finance. Our business intelligence and advisory services give clients access to the data, expertise and tools they need to navigate an increasingly complex environment and maximize their performance. Auriemma serves the consumer financial services ecosystem from our offices in New York City and London. For more information, call Jaclyn Holmes at (+1) 646-454-4200.
(New York, NY): Apple’s new credit card will be released later this summer and is well-positioned to capture the attention of Apple’s existing shoppers and Pay users, according to a study by Auriemma Research. The card appears designed with Apple enthusiasts in mind and may encourage the use of Apple Pay.
Although the Apple card has not yet been released, it is already well-liked by Apple Pay users. Three-quarters of them are attracted to the card’s offer, which includes a strong incentive for using Apple Pay at the point-of-sale. Cardholders earn 3% cash back on all Apple purchases, 2% for using Apple Pay, and 1% for using the physical card. Unlike most rewards cards, Apple’s rewards will be available automatically, deposited on an Apple Cash card daily or applied as a statement credit with no activation or redemption necessary.
“In the past, any uncertainty or issues using mobile payments often led consumers to fall back to the plastic card to avoid friction at the point-of-sale,” says Jaclyn Holmes, Director of Auriemma Research. “Shoppers now have reason to ask the cashier if Apple Pay is accepted in order to maximize the rewards they’ll earn on the purchase.”
Cash back won’t be the only thing encouraging Apple cardholders into Apple Pay. The digital card will be stored in the Wallet app, along with accompanying tools and features (e.g., sophisticated spend analyzers, transparent payment calculators). Because of this integration, Apple cardholders’ familiarity with the Wallet app (and Apple Pay) should increase.
Apple’s titanium card is different from others on the market, featuring a sleek and numberless display and a redesigned EMV chip. But even Apple’s physical card softly promotes Apple Pay usage. Those who want to make contactless payments will need to use their phone, since the physical card is not expected to support contactless technology.
“The Apple card appears to be another way to get brand loyalists interested in Apple Pay,” says Holmes. “While we shouldn’t expect swaths of non-Apple users to buy an iPhone so they can use an Apple card, we can expect increased engagement among those who already own one.”
Apple Pay users are already abuzz about the offer, according to Auriemma’s study. About half of Apple Pay users have heard about the card, an extremely high proportion considering the card has not yet launched. Awareness for the card is also notable (27%) when looking broadly at all consumers eligible for mobile payments.
Apple’s announcements often garner significant media attention, but these high levels of awareness are impressive for payments. An introductory video for the Apple card uploaded in tandem with the late-March announcement has racked up 17.5 million views as of August 2019, over ten times the number of views for similar videos for other cards.
Interest in Apple’s new credit card also spans beyond brand loyalists. Three-quarters of Apple Pay users are attracted to the Apple card, but so are 60% of eligible non-users. Those who are not attracted to the card most often say it is because they don’t make frequent Apple purchases or they don’t use Apple Pay much/at all. A notable proportion also mention that the rewards were unappealing, citing better rewards with existing cards or cash back percentages being too low.
The interest among non-users represents an opportunity for Apple to increase its Pay user base after over four years of stagnant growth. And between the cash back offer, the integration with Apple Pay, and the contactless technology only being available with the phone, it appears the Apple card is well-positioned to do just that.
“While the Apple card may have an impact on Apple Pay usage, its reception will likely impact other card products and comfort with mobile payments generally,” says Holmes. “Many payment professionals are already thinking about how cardholder expectations for the digital experience may shift in response.”
Survey Methodology
This Auriemma Research study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) between April-May 2019, among 2,029 mobile pay eligible consumers. Respondents were screened to own an eligible smartphone or wearable device. All respondents also have a general purpose credit card in their own name.
About Auriemma Group
For more than 30 years, Auriemma’s mission has been to empower clients with authoritative data and actionable insights. Our team comprises recognized experts in four primary areas: operational effectiveness, consumer research, co-brand partnerships, and corporate finance. Our business intelligence and advisory services give clients access to the data, expertise and tools they need to navigate an increasingly complex environment and maximize their performance. Auriemma serves the consumer financial services ecosystem from our offices in New York City and London. For more information, call Jaclyn Holmes at (212) 323-7000.
(New York, NY) The death of plastic. Apple Pay’s launch in 2014 invited headlines touting the digital payments revolution, but in the years since, plastic has thrived. Consumers swiped, they dipped, and now they’re beginning to tap– all with a physical card. Some argue that the proliferation of tapping a physical card at checkout will increase comfort tapping one’s phone. However, a new issue of Auriemma Research’s Mobile Pay Tracker suggests that contactless cards may have some mobile-friendly consumers reverting from digital to physical payments.
Although mobile payments and contactless cards utilize the same near-field communication (NFC) technology, adoption of mobile payments is well behind contactless cards. Three plus years after its mainstream release, mobile payments have only been used by one-third of those eligible—far less than the 59% of contactless cardholders who have tapped with their contactless card.
Consumers appear amenable to contactless cards, specifically because the device (i.e., the physical card) is so familiar. Mobile payment users, however, are even more open to tapping their cards because they’ve been exposed to tapping with their phone. Three-quarters of mobile payment users have used a contactless card to make a contactless payment, compared to just four-in-ten non-users.
“Consumers have been repeatedly asked to change their payment behavior,” says Jaclyn Holmes, Director of Auriemma Research. “While adjusting to various card payments is easy, the larger switch in the physical mechanism of phone payments takes more time.”
Mobile payment users are enthusiastic about contactless technology. The majority (60%) expressed interest in using contactless cards, compared to just over one-quarter of mobile payment non-users. Mobile payment users are also more likely to believe contactless payments can improve everyday purchases. Over one-third say their experience with self-checkout lanes, grocery stores, vending machines, and public transportation would be made better if they were able to use contactless payments.
Until now, many terminals were not accepting of EMV contactless payments because of outdated technology. This has been a struggle for EMV contactless cards as well as Apple, Google, and Samsung Pay. However, with Visa now requiring all contactless terminals to support NFC contactless technology, both EMV contactless cards and mobile payments will have the space to grow.
Although these upgrades will make mobile payments an option at an increasing number of locations, that doesn’t mean mobile payment adoption will rise. Overall, consumers are uncertain about whether contactless card payments are better or worse than mobile payments—65% say they are about the same, 18% say they are better, and 17% say they are worse.
Those who believe contactless card payments are better typically say they are faster, easier, and more secure than mobile payments—three things mobile payment users often describe when asked why it is better to pay with mobile then with plastic. Those who believe contactless card payments are worse often express concerns about security (e.g., more susceptible to fraud, wouldn’t be any safer) and say they still need to take out their payment card.
“Consumers will have more options at checkout than ever before, but will they choose contactless cards or a mobile wallet?” asks Holmes. “Although upgraded terminals benefit both methods, the point-of-sale experience continues to be fragmented for mobile payment users who must pull out their physical card when things go awry.”
With contactless cards, technological barriers to tapping won’t upend the entire payment process. Consumers can still dip or swipe. This alone makes the case for contactless cards, which offer the mobile payment benefits people love without the barriers that have persisted since its rollout.
Survey Methodology
This Auriemma Research study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) between January-February 2019, among 2,001 mobile pay eligible consumers. Respondents were screened to own an iPhone 8/8+7/7+/6/6+/6s/6s+/SE/X or Apple Watch (in combination with an iPhone 5/5C/5S) – a Samsung Galaxy S9, S9+, S8, S8 Edge/Edge+, S7, S7 Edge, S7 Active, a Samsung Galaxy S6, S6 Edge/Edge+, S6 Active or Galaxy Note 5, Note 7, or Note 8 – Gear S2 or S3 watch (in combination with an Android/iPhone smartphone) – and/or other Android phone with KitKat (4.4) OS or newer. All respondents also have a general purpose credit card in their own name.
About Auriemma Group
For more than 30 years, Auriemma’s mission has been to empower clients with authoritative data and actionable insights. Our team comprises recognized experts in four primary areas: operational effectiveness, consumer research, co-brand partnerships, and corporate finance. Our business intelligence and advisory services give clients access to the data, expertise and tools they need to navigate an increasingly complex environment and maximize their performance. Auriemma serves the consumer financial services ecosystem from our offices in New York City and London. For more information, call Jaclyn Holmes at (212) 323-7000.