ARCHIVES: This is legacy content from before Industry Dive acquired Mobile Commerce Daily in early 2017. Some information, such as publication dates, may not have migrated over. Check out our topic page for the latest mobile commerce news.

In-store mobile payments grow by more than three times in 2015: report

There was a substantial jump in the number of people using a phone to make an in-store payment in 2015, growing more than three times from 5 percent to 18 percent, according to a new report from Deloitte.

According to the report, 2015 Global Mobile Consumer Survey: The Rise of the Always-connected Consumer, this was the year of mobile payments, with a growing number of consumers using their phones at least once a week to make an online purchase, pay a bill and make an in-store payment. The report also found that “while out shopping” ranks as the leisure activity when consumers are most likely to simultaneously use their phone.

“Perhaps both the biggest news and most surprising finding – not only within mpayments but across the survey – is the usage statistic on in-store mobile payments,” said Craig Wigginton, vice chairman and U.S. telecommunications leader at Deloitte LLP.

“From year to year on any given metric we track, growth in the high single digits typically indicates a strong performing trend,” he said. “Given that we saw the number of consumers who have made an in-store payment nearly quadruple – jumping to 18% from a meager 5% in 2014 – this is more than just a strong performing trend and indicates very good potential for this sector in the future.

“That said, it is a sector growing from virtually nothing so it still may take several years to materialize, but there is undoubtedly a wealth of untapped opportunity given that 80% of consumers have yet to try out the technology.”

Weekly mobile payments
In 2014, only 5 percent of consumers had ever used their phone to make an in-store payment. In 2015, 3 percent use their phone daily to make in-store payments, 5 percent weekly, 5 percent less often than once a week and 5 percent have only done so once or twice.

Not surprisingly, there is significant variation in the use of mobile payments by age group, with 31 percent of 18-to-24-year olds and 36 percent of 25-to-34-year olds using mobile payments in-store compared to 21 percent of 35-to-44-year olds, 8 percent of 45-to-54-year olds and, 5 percent of 55-to-64-year olds and 4 percent of 65-to-74-year olds.

The top reasons for not making an in-store payment include security, named by 50 percent, and a lack of clear benefits, named by 36 percent. Reasons for not using mobile payments are similar across most age groups.

Of those who have not used mobile payments 17 percent say they would find it useful to pay via their phone in a coffee shop, 19 percent at public parking, 16 percent to pay for groceries, 17 percent to pay for fast food, 16 percent using public transport and 18 percent at the pump in a gas station.

Consumers also indicated they would most trust traditional financial institutions over tech companies for their in-store payments.

Online purchasing
Deloitte’s survey reveals that 13 percent of respondents use their phone to make an online purchase at least once a week and 18 percent less often than once a week.

With 37 percent saying they use their phones to browse shopping Web sites and apps, Deloitte concludes that nearly one-third of these consumers make an online purchase of a product.

When it comes to using a smartphone to provide a proof of purchase, 11 percent do so at least once a week and 13 percent less often.

Paying a bill via a smartphone is done at least once a week by 14 percent and less often by 13 percent.

Ten percent reserve a product online from their phone at least once a week and 10 percent do so less often.

Slightly less popular is making an online purchase of a service, which is done by 8 percent at least once a week and 6 percent less often.

Making an in-store payment is done by 8 percent at least once a week and 5 percent less often.

There is significant variation in the uptake of these activities by age, with younger consumers not surprisingly the biggest adopters.

Leisure activities
The report also found that “while out shopping” ranks as the leisure activity when consumers are most likely to use their phone simultaneously. A full 92 percent of respondents said they use their mobile phone while out shopping compared to 89 percent for spending leisure time, 87 percent for talking to friends and 87 percent for watching TV.

The use of smartphones while shopping is strong across age groups.

“Clearly, availability of terminals in retail environments that support mpayments technologies is absolutely critical to the success of the mpayment ecosystem,” Mr. Wigginton said. “If there is nowhere for consumers to use the technology, then the outlook for mpayments will not live up to expectations.”

Final Take
Chantal Tode is senior editor on Mobile Commerce Daily, New York