Tag Archive for: mobile wallet

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ID Provisioning Set to Increase Mobile Pay Usage

(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.

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Apple Pay and Alipay Show How Digital Wallets Can Surpass Physical Wallets

(New York, NY):  Mobile payments may be one step closer to replacing the physical wallet.  Apple Pay and Alipay are continuing to expand their wallets to include much more than just payments—Apple Pay announced students can now carry digital student IDs that can open dorm rooms and function as library cards; Alipay’s users can now use their digital wallets to store digital marriage certificates.

And according to Auriemma Group’s Mobile Pay Tracker, product expansions like these can increase consumers’ willingness to adopt mobile payments overall. Auriemma’s research revealed that over one-third of mobile payment users would be interested in using mobile payment platforms to store identification cards. The same percentage also said they would be interested in using mobile payment platforms for government documents. This could create major lift in demand for these platforms beyond simply point-of-sale payments.

Apple announced in October 2018 that its wallet will support student IDs at three universities, allowing students to use their phone while doing laundry, going to the gym and taking out library books. While overall mobile payment usage is consistent compared to two years (31% of eligible consumers), developing the habit of using a mobile wallet on campus could have a profound impact on mobile payment usage going forward.

This is especially impactful considering mobile payment users are predominantly millennial (45%) and college-educated (69%). But over the last two years the average age of mobile payment users increased from 37 to 39 years old. The university market represents an opportunity to promote mobile payments to younger consumers, who are most likely to adopt the payment method.

The same month as Apple’s announcement, China’s Alipay joined forces with the Jiangsu province to provide digital marriage certificates for the province’s residents. The digital certificate makes it easier for users to apply for a mortgage, property transfer, or even establish a startup.

Allowing users to safely store digital versions of documents that aren’t always easily accessible— like a Social Security card, passport or birth certificate—positions mobile wallet platforms to surpass what a physical wallet can provide. To move beyond digital storage, mobile payment providers will need to partner with governmental agencies (like Alipay’s partnership with Jiangsu) to add utility, making them valid, accepted alternatives to the physical copy.

“Adding non-payment functionalities to mobile wallets is the next logical step in earning broader consumer acceptance for mobile payments,” says Jaclyn Holmes, Director of Auriemma’s Payment Insights practice. “Smartphones have already consolidated our technologies into a handheld package; using them to store keys, IDs, and government documents will only expand on that mission and push the technology forward.”

Mobile payment users show interest in using mobile wallets beyond the point-of-sale, but it will take some convincing to convert those who don’t use the mobile payment platforms already. While 40% of mobile payment users are interested in using mobile wallets for event tickets, membership cards, and boarding passes, only about 25% of non-users are interested. If mobile pay-eligible consumers had to select a single non-payment wallet addition, however, both users and non-users would pick storing government documents as the top priority.

“These product expansions point the way to how a mobile wallet can transcend the physical wallet—whether it be through providing you access to your apartment, storing documents you’d normally keep at home, or applying coupons directly to your purchase,” says Holmes. “For mobile payments to be successful, they can’t just replace the physical wallet, they need to improve upon it.”

Survey Methodology

This study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) between July-August 2018, among 1,518 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.

 

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34% of Those Eligible Are Using Mobile Payments, But Few Would Recommend Them

(New York, NY):  After a year of celebrity following its release in late-2014, Apple Pay had to share the spotlight with Android Pay and Samsung Pay. Since then, the market has grown even more crowded, with merchants, such as Walmart and Kohl’s, developing Pay options for their consumers to use at the point of sale. But according to Auriemma’s Q1-2018 Mobile Pay Tracker, usage of Apple, Google (formerly Android), and Samsung Pay has still managed to grow five points (to 34%) compared to Q1-2017. While this growth is a positive for mobile payments, a declining proportion of these users would recommend the service, signaling trouble ahead.

“The influx of new players makes the future of the Big Three uncertain,” says Jaclyn Holmes, Director of Payment Insights at Auriemma. “Being first to market hasn’t given Apple, Google, or Samsung a leg up on mobile payment newcomers. Providers who are able to deliver a more positive, reliable Pay experience are most likely to encourage continued Pay usage, while others may struggle in the years ahead.”

Problems at the point of sale can prevent even the most enthusiastic Pay users from developing the habit of paying with their mobile device. This, in turn, lessens the opportunity and likelihood for recommending the service. In fact, 42% of mobile payment users wouldn’t recommend the service, up 11 points compared to last year (31%).  And because these sentiments are strongest among the most inactive Pay users (87% very inactive vs. 6% very active), it’s clear developing the habit is key to the success of mobile payments. But this routine could be more easily developed with merchant mobile payments, which have more control over their Pay experience and can eliminate many of the barriers that trouble Apple, Google, and Samsung Pay users.

Merchants have an advantage over the Big Three: a guarantee of acceptance across all its stores and a uniform in-store experience. While most of Apple, Google, and Samsung Pay users think in-store acceptance has improved since these mobile payments launched, reported issues at the point of sale have remained the same compared to last year. Among the issues, unfamiliar cashiers and an inability to complete the transaction come out on top, with a plurality of in-store Pay users who quit and decide to swipe their card instead. All of this could potentially be avoided with a well-conceived Merchant Pay option.

“Merchants have the power to create a frictionless mobile payment experience,” says Holmes. “They can train their store employees to become Pay champions who promote the payment option, offer assistance, and do so in a way that keeps lines moving and customers smiling.”

Survey Methodology

This study was conducted online within the US by an independent field service provider on behalf of Auriemma Consulting Group (Auriemma) in January/February 2018, among 1,527 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 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.

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Incentives Push Mobile Pay Users Over Tipping Point, Increasing Method Frequency and Spend at Checkout

(New York, NY):  Mobile pay users are an enthusiastic bunch, but admit they sometimes forget to choose mobile payments at checkout. New data from Auriemma Group’s Mobile Pay Tracker suggests that transaction-based incentives may provide the nudge needed to get higher frequency and spend through mobile pay. The study of 1,505 mobile pay eligible cardholders didn’t just reveal incentive’s benefits to Pay providers, but to issuers and merchants as well. Those who leverage incentives are positioning themselves for greater success as mobile payments become more commonplace.

Regardless of who funds the incentives, issuers, merchants, and Pay-app providers all have something to gain. Increases in mobile pay spend and frequency of use will have a marked impact on the most frequently used (MFU) card in the mobile wallet, while also encouraging use of mobile pay instead of a physical wallet. As the mobile pay user population grows, it will become increasingly important to be the top of mobile wallet card. Interestingly, two-thirds of mobile pay users already say that the MFU card in mobile pay is also their most used card overall.

“While cards used in the mobile wallet benefit from merchant- and Pay-funded incentives in the short term, those not already being used could miss out, especially as mobile pay grows,” said Jaclyn Holmes, Director of Auriemma’s Payment Insights. “Pay apps very well may be the future of payments. Incentives provide an opportunity for issuers and merchants to have consumers associate their brand with the payment method, which could turn out to be a valuable long-term investment.”

Currently, 25% of consumers with an eligible smartphone use mobile pay, mostly composed of a highly covetable demographic of employed, affluent, and college-educated consumers. Of these consumers, 32% recall being offered a mobile pay incentive (compared to 19% earlier in the year), and when the incentive is offered, the take rate is high: 86% of incentive recipients report claiming the incentive at the point of sale in-store or in-app.

In the past, these incentives were primarily offered by banks, but in Auriemma’s most recent study the proportion of banks offering incentives to their customers compared to last quarter dropped from 58% to 40%. Merchant-funded offers are now most prevalent (46%), and regardless of who offered the incentive, nearly eight in ten respondents (78%) report their offer was linked to a specific merchant. Many consumers, however, are not seeking these incentives out—most hear about them from friends, or through emails or letters.

Consumers who are offered incentives, unsurprisingly, use mobile payments more frequently than those not offered—demonstrating a clear influence on choice of payment method at checkout. Over a one-week period, for example, those who received an incentive to use mobile pay in-store did so 4.6 times, compared to 3.1 times for those not offered an incentive. The same is true of in-app purchases, with incentivized shoppers purchasing four times in a week, compared to 2.4 for those not offered an incentive.

“Incentives can give consumers the push they need to use mobile pay,” said Holmes. “Their greatest impact will be on consumers on the cusp of using the method, but who need an additional nudge.”

Survey Methodology

This study was conducted online within the US by an independent field service provider on behalf of Auriemma Consulting Group in November 2016, among 1,505 mobile pay eligible consumers. Respondents were screened to own an iPhone 7/7+/6/6+/6s/6s+ or Apple Watch (in combination with an iPhone 5/5C/5S) – a Samsung Galaxy S7, S7 Edge, S7 Active, a Samsung Galaxy S6, S6 Edge/Edge+, S6 Active or Galaxy Note 5, Note 7 – 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. In addition to the quantitative web survey, ten in-depth interviews (IDIs) were conducted during December 2016.

About Auriemma Group

Auriemma is a boutique management consulting firm with specialized focus on the Payments and Lending space. We deliver actionable solutions and insights that add value to our clients’ business activities across a broad set of industry topics and disciplines. For more information, call Jaclyn Holmes at 212-323-7000.

 

 

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27% of the Eligible Population is Using Mobile Payments

New York, NY):  Back in October of 2014, Apple Pay was launched with great fanfare, and for almost a year it was the only game in town for consumers who wanted to pay with their smartphones. Since then it’s been joined by Android Pay and Samsung Pay, with more branded mobile payment solutions, such as Walmart Pay and Chase Pay, waiting in the wings. But is anyone using them?

The answer, according to the latest Mobile Pay Tracker survey from Auriemma Group, is a qualified yes: about 7% of all smartphone owners* claim to have at least tried mobile payments. “It’s important to remember that less than half the smartphones that US consumers carry are capable of mobile payments,” says Marianne Berry, managing director of Auriemma’s Payment Insights practice. “Among those with an eligible phone, 27% of consumers we surveyed say that they have used Apple, Android, or Samsung Pay.”

However, that doesn’t mean they can leave their wallets at home yet.  Mobile pay users still put the lion’s share of their purchases on old-fashioned plastic, since stores that accept mobile payments are still hard to find in the US: 39% say they would use mobile payments more if more stores/apps accepted it. 61% say their mobile pay usage is supplanting cash transactions, suggesting that the phones are being used for smaller purchases, confirmed by average ticket size—-one-third of those who have used mobile pay in the past week made a purchase of $25 or less. These transactions are made both in-app and in-store, except for Samsung Pay, which has yet to offer in-app payments. On average, users report that 17% of their discretionary spending was done with mobile pay.

Even when they find a store that accepts mobile pay, only one-third of mobile pay users (31%) pay that way every time they know it is accepted, most frequently citing that they simply forgot. “Reaching for the phone instead of the wallet isn’t an automatic reflex, even for mobile pay enthusiasts,” said Berry. “And even if they do remember, many will give up and use their plastic cards if they encounter friction at the point of sale, particularly if there are other shoppers in line behind them.”

Mobile payments have been around for only a year, a fraction of the many decades that plastic cards have dominated. As the upgrade cycle puts the newest smartphones into the hands of more consumers, increasing numbers of them will have the opportunity to try out this new way of paying. “Overall satisfaction with mobile payments is quite high at 80%, despite complaints about low merchant penetration and inconsistent customer experience at point of sale,” Berry stated. “But mobile payment has yet to reach the tipping point that will take it from novelty to norm.”

Survey Methodology

The study was conducted online among 2004 consumers in the US with Apple Pay eligible (n=1,000), Android Pay eligible (n=838), and/or Samsung Pay eligible (n=327) smartphones between March 3 – April 7, 2016. Respondents were screened to own an iPhone 6/6+/6s/6s+ or Apple Watch (in combination with an iPhone 5/5C/5S) – a Samsung Galaxy S6, S6 Edge/Edge+, S6 Active or Galaxy Note 5 – 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. In addition to the quantitative web survey, twenty in-depth interviews (IDIs) were conducted March 21, 2016 – March 25, 2016 via telephone with Android Pay and Samsung Pay users recruited from the quantitative web survey. For this round of IDIs, the focus is or was on the Android and Samsung Pay users, and their usage and experience thus far.

* Auriemma conducted a standalone market sizing study in March 2016 among 1,100 US adults. Data was weighted by gender, age, race/ethnicity, household income, and education to be nationally representative of the entire US adult population (aged 18+).

About Auriemma Group

Auriemma is a boutique management consulting firm with specialized focus on the Payments and Lending space.  We deliver actionable solutions and insights that add value to our clients’ business activities across a broad set of industry topics and disciplines.  For more information call (212) 323-7000.

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Apple Pay Use Growing in US

(New York): Apple Pay usage in the US is growing, driven by both increased frequency of transactions and the expanding base of iPhone 6 owners, according to Auriemma Group’s Apple Pay Tracker, which interviewed 500 iPhone 6 and 6+ owners between May 29 and June 15, 2015. Forty-two per cent of Apple 6/6+ owners reported having used Apple Pay, virtually identical to the proportions reported in two previous waves of the study conducted in February and April 2015. “While the proportion of users has remained stable, the denominator has grown through new iPhone and Apple Watch sales and the upgrade cycle. We’ve also seen the average number of transactions increase both in-store and in-app,” says Marianne Berry, Managing Director of Auriemma’s Payment Insights practice.

Data from the study indicates that users consider Apple Pay to be more than a novelty, Berry notes. “It’s not surprising that the first cohort to own the newest iPhone would be eager to try Apple Pay, so we were particularly interested in comparing trial to adoption rates. Eighty-four percent of Apple Pay users reported having made more than three transactions in stores, and 76% have used it more than three times in-app, suggesting that the abandon rate is low.”

The number of places where Apple Pay is used has also increased. In the April survey only 13% of Apple Pay users had used it in more than six stores, while two months later that number had grown to 24%. During the same two month period the number using Apple Pay for 6 or more apps grew from 1% to 10%.

“It’s likely that the number of retailers accepting Apple Pay will expand, especially as merchants hear from these customers and look at their purchasing power. Seventy per cent of Apple Pay users state that they are more likely to choose a store that accepts Apple Pay,” Berry says, “and this group is even more affluent than the overall Apple phone owner population.”

Indeed, one of the few complaints users have is a lack of opportunities to use Apple Pay. The effect is particularly notable in the burgeoning m-commerce market, as Apple Pay devotees have learned to search the App Store to find apps that accept the payment method. “It’s a rare instance of consumers starting out with a preferred payment method and searching for a place to spend it—like the proverbial hammer looking for a nail.”

Despite the enthusiasm of early adopters, Apple Pay sales volume accounts for only a tiny share of overall credit and debit card sales, and Berry doesn’t expect that to change quickly. “In the early days after launch, we found a high level of intent to use among those who hadn’t tried it yet. As more iPhone owners gain the ability to use the service through the upgrade cycle, we’re seeing a pretty stable proportion of about 30% who are taking a ‘wait-and-see’ attitude, often citing security concerns about a new technology. The introduction of Android Pay later this year may accelerate the evolution of perceptions about mobile payments moving from novelty to mainstream.”

About Auriemma Group

Auriemma is a boutique management consulting firm with specialized focus on the Payments and Lending space. We deliver actionable solutions and insights that add value to our clients’ business activities across a broad set of industry topics and disciplines. For more information, call (212) 323-7000.

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Auriemma Launches Apple Pay Consumer Adoption Study

(New York, NY):  Auriemma Group announced Thursday the launch of Apple Pay Tracker, a longitudinal study that will monitor adoption and usage of the mobile wallet throughout 2015.

The study, comprising bimonthly surveys of 3,000 iPhone 6 and 6 Plus users over the course of the year, will illuminate Apple Pay’s impact on payment providers, retailers, and other industry stakeholders.

“Apple Pay may change where people shop, how they pay, and the overall balance sheet of the payments system,” said Marianne Berry, Managing Director of Auriemma’s Payment Insights practice. “Issuers, merchants, networks, investors—all need to monitor these changes and have the flexibility to respond immediately to challenges.”

Every eight weeks throughout 2015, subscribers will receive a report tracing current levels of Apple Pay activation and usage by a randomized sample of 500 iPhone 6 owners. In addition to measuring growth in the adoption curve, subscriber reports will include information gleaned from in-depth interviews with respondents detailing their reasons for adopting—or bypassing—the service. Each iteration of the research will examine a unique subset of users, ranging from early to mainstream adopters as the market matures. Interviews with respondents will explore:

  • Motivations for usage
  • Changes to behavior and purchasing habits
  • Impacts on the customer relationship and brand attribution
  • The role of social influences in adoption and usage
  • Perceived security benefits and concerns
  • User experience and likelihood to recommend Apple Pay to other

“There is intense interest in both the industry and mainstream media about Apple Pay,” Berry said. “While transaction volumes and other aggregate data will be widely reported, these statistics won’t explain the behavior driving the numbers.“For example, how much growth in transaction volume is being driven by regular users and how much is attributable to growth in iPhone 6 sales? Are consumers changing their choice of retailers depending on the availability of Apple Pay? Do consumers make a conscious choice at point of sale among the cards provisioned in their Passbook, or does the default card become the most frequently used?”

Apple Pay Tracker joins a suite of market intelligence and syndicated research studies offered by Auriemma’s Payment Insights practice. In addition to mobile payments, Auriemma conducts consumer research focused on credit, debit, and prepaid products.

“Whether or not Apple Pay reaches broad acceptance,” Berry said, “millions of consumers will pay with their phones for the first time. This may be the long-awaited catalyst that ignites mobile payments.”

 About Auriemma Consulting Group

Auriemma is a boutique management consulting firm with specialized focus on the Payments and Lending space.  We deliver actionable solutions and insights that add value to our clients’ business activities across a broad set of industry topics and disciplines.  For more information about Auriemma’s research, please call 212-323-7000.

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