NEW YORK, Sept. 4, 2014 (GLOBE NEWSWIRE) -- Mobile payments are quickly becoming commonplace for smartphone/tablet owners according to the recent AlixPartners Mobile Financial Services Tracking Study. Approximately 40% of U.S. smartphone/tablet owners surveyed reported using their mobile device for a mobile money-related transaction in the month prior to the survey.
Younger Consumers Embrace Mobile Payments
Younger consumers appear to show the greatest adoption of mobile money-related transactions. The AlixPartners study also shows that 63% of the 18-25 year-olds and 56% of 26- to 35-year-olds report making a recent mobile money-related transaction. Meanwhile, it shows that 40% of smartphone/tablet owners between 35 and 44, and 27% of 45 to 54 year-olds reported conducting a mobile money-related transaction in the previous month.
Teresa Epperson, managing director in the Financial Services Practice at AlixPartners, said, "Consumers under the age of 35 are using their smart mobile devices to transform shopping and payments. These younger consumers are embracing the utility and value delivered through mobile shopping, and they are driving a fundamental transformation of the consumer shopping and payments experience."
Adoption of mobile money-related transactions varies by type of payment and age cohort, according to the study. Younger smartphone/tablet owners surveyed, 18-25 year-olds and 26-34 year-olds respectively, reported that in the past month:
- 28% and 27% made a purchase online/at a website using their mobile device's browser and/or a mobile app
- 21% and 23% paid a recurring bill using their mobile device
- 23% and 19% made a purchase in a store, restaurant or other physical location using a mobile device
- 18% and 16% paid for a service such as a plumber, landscaper or pizza delivery
"The steady rise in awareness and adoption of new mobile-payment capabilities continues, with paying a recurring bill and making a purchase at a physical location gaining real traction with consumers. While consumers are becoming more comfortable using their mobile devices to make payments, no clear winner in mobile payments has emerged. The big question is who can move fast enough to build the critical mass required to deliver to consumers what they want?" said Bob Hedges, managing director in the Financial Services Practice at AlixPartners.
Consumer Engagement, But No Clear Winner in Mobile Payments
While consumers are clearly engaged with mobile payments, and a wide variety of payment options is increasingly available to consumers at points of sale, the broad, scaled infrastructure required to accept each of these mobile payments across retailers is simply not in place. As a result, consumers are using a mix of alternative approaches to make payments using their mobile devices. The AlixPartners study spotlights the array of solutions currently being used by consumers who make in-store purchases with a mobile device:
- 24% scan a barcode or QR code through a mobile-payment offering such as LevelUp or the Starbucks app
- 18% use other mobile checkout services such as Amazon 1-Click
- 16% manually enter payment-card and billing information at checkout
- 15% check into a store or restaurant and pay by stating their name at checkout through an app like Square Wallet or PayPal Here
- 13% use texting or SMS through apps like PayPal where users text a keyword or code to pay
- 11% use a contactless method such as NFC where users wave their phones near the checkout register for payment using the Google Wallet app
Hedges noted, "While the infrastructure required to make mobile payments truly ubiquitous is not yet in place, it is clear that consumers are not willing to wait and are willing to use and experiment with mobile-payment technologies as they become available. Consumers are turning the popular adage on its head to, 'We are coming, so you had better build it'."
As consumer shopping and payments behavior continues to shift with consumer adoption of new technology and solutions, payment companies – both the traditional incumbents and the new entrants – are scrambling to ensure they build and strengthen their relevance in the increasingly mobile consumer marketplace. With real value available to consumers, and the resulting consumer demand starting to emerge at an accelerating pace, the next 12 to 18 months could determine what enduring, scalable solutions providers have the capacity to build.
About the Study
The AlixPartners Mobile Financial Services Tracking Study comes from a consumer facing survey conducted by AlixPartners at the end of the second quarter of 2014, and is the latest edition in AlixPartners' semi-annual Franchise Health Survey. The overall survey has been conducted in the second and fourth quarters annually since 2008, and the most recent one includes an online panel of nationally representative samples of 5,006 U.S. consumers of at least 18 years of age.
AlixPartners is a leading global business-advisory firm of results-oriented professionals who specialize in creating value and restoring performance at every stage of the business lifecycle. We thrive on our ability to make a difference in high-impact situations and deliver sustainable, bottom-line results. The firm's expertise covers a wide range of businesses and industries whether they are healthy, challenged or distressed. Since 1981, we have taken a unique, small-team, action-oriented approach to helping corporate boards and management, law firms, investment banks and investors respond to critical business issues. For more information, visit www.alixpartners.com.
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