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PayPal leads the pack for mobile wallet awareness: PwC

When it comes to mobile wallets, consumers are most knowledgeable about PayPal compared to competitors such as Google, Starbucks, MasterCard and Square, according to a new study from PwC.

PwC’s “Consumer Intelligence Series: Opening Mobile” report looks at which mobile wallets are sticking with consumers for both awareness and usage. The report suggests that retailers, manufacturers and third-party mobile wallet providers must take a consumer-first approach for the technology to scale.

“Mobile wallet providers need to understand and meet – or even exceed – consumer trust expectations,” said Ron Haas, Dallas-based partner at PwC, New York.

“This includes addressing security and privacy concerns, but also safeguarding against solution failure and backup mechanisms, if, for example, the phone is lost or stolen,” he said.

“In addition, until there is broad institutional acceptance of mobile wallets, mobile wallets may remain in use only with the early-adopter community.”

Pay on mobile
The PwC study was rolled out with two survey groups from Nov. 2012 – January. The first sample group is comprised of 1,000 geographically-dispersed consumers between the ages of 18 – 74 years old. In the second part of the research, PwC ran focus groups in Dallas.

While consumer awareness about mobile wallets is high, the number of consumers using the technology is lower across every service.

One-hundred percent of consumers surveyed in the report were aware of PayPal’s mobile wallet application. Eighty-three percent of consumers have used PayPal’s mobile wallet.

Fifty-nine percent of consumers were aware of Google Wallet. However only 9 percent of consumers surveyed said that they had used the service.

Google Wallet’s awareness is primarily driven by Android users. Sixty-six percent of the consumers who were familiar with Google Wallet were Android owners.

Starbucks’ mobile payment app also had 59 percent awareness with consumers.

Sixty-five percent of consumers aged 18-29 years old were familiar with the Starbucks mobile payment app. In the 30-44 year-old age range, 62 percent of consumers were aware of the app.

Additionally, 63 percent of iOS users and 64 percent of Windows and BlackBerry owners were aware of the app.

Starbucks is also the only brand on the list of the top seven mobile wallet apps, showing how the coffee chain has aggressively pushed into mobile payments in the past few years.

MasterCard’s Pay Pass has a 46 percent awareness rate, and a 7 percent usage rate.

Similarly, 40 percent of consumers were aware of Square, but only 8 percent of users had used the technology.

Isis and Visa’s technology ranked the lowest for consumer awareness. Twenty-two percent of consumers surveyed knew what was and 17 percent knew what Isis was.

Wary users?
The study points to security as hindering consumer adoption of mobile wallets.

Eighty-five percent of consumers surveyed said that someone stealing their phone with access to their information concerns them about mobile wallets.

For example, the report points to high-technology protection such as fingerprint identification as a security option that consumers are interested in that will aid in more widespread acceptance of mobile wallets.

Similarly, banks and financial institutions have the upper hand in consumer trust for managing a mobile wallet. However, the perception that banks can roll out mobile wallets is significantly smaller.

Fifty percent of consumers rated their primary financial institution as the most trustworthy provider for a mobile wallet. Only 18 percent of consumers believed that their primary bank would be capable to provide a mobile wallet.

On the flip side, 22 percent of consumers trusted a credit card company to develop a mobile wallet. Thirty-five percent of users believed that the credit card companies would be capable of rolling out a mobile wallet.

The study also looked at which types of activities consumers would be most willing to use a mobile wallet for.

Forty-five percent of consumers surveyed said that they were likely to transfer money to another user via a mobile wallet.

Forty-three percent of consumers surveyed said that they would be likely to pay for physical goods or services in a store with an electronically-stored credit or debit card.

However, this is a sliver of the percentage of consumers willing to store money on their handsets. Only 17 percent of consumers would save money on their mobile phones.

According to the study, one of the biggest use cases with mobile wallets is around paperless ticketing. Sixty-six percent of the consumers surveyed said that they would use mobile wallet as a ticket for an event or transportation.

IOS users are most likely to use a mobile wallet, pointing to the success of Apple’s built-in Passbook app. Seventy-two percent of iOS users would use a mobile wallet to store event or transportation tickets.

Fifty-seven percent of all consumers surveyed would be willing to use a mobile wallet as a hub for loyalty cards, and 56 percent of users are interested in using the technology for coupons.

This shows the opportunity for retailers to enter the mobile wallet space with incentivized and location-based offers.

Only one percent of consumers polled viewed retailers as either capable or trustworthy of developing a mobile wallet, which indicates that brands will need to team up with financial institutions and credit card companies to make an impression on consumers.

“While consumers appear to mainly trust financial institutions and credit card companies for financial transactions, key mobile wallet incentives are required for broad-based consumer adoption,” said Chris Isaac, partner at PwC.

“These incentives include money savings typically associated with store cards and coupons, so these are critical parts of the wallet,” he said.

“So, trust is necessary, but it is not sufficient for broad consumer market adoption. Retailers and brands have the opportunity to provide critical additional benefits that will drive adoption – such as money savings incentives via couponing.  Retailers and brands should therefore work closely with financial institutions and credit card companies as well as others in the ecosystem to provide a solution with the necessary incentives that will not only meet consumer trust expectations, but also provide the benefits needed to drive adoption.”

Final Take
Lauren Johnson is associate reporter on Mobile Commerce Daily, New York