New IDC Financial Insights Consumer Payments Survey Reveals Over a Third of all U.S. Residents Use Mobile Payments
09 Jul 2012
Increased popularity of emerging payment technologies bolster 8th annual survey results
FRAMINGHAM, MA, July 9, 2012 – IDC Financial Insights today announced the results of the eighth annual Consumer Payments Survey, focused on the usage of emerging payment technologies. The new report, “Business Strategy: Results from the 2012 Consumer Payments Survey” (Document # FIN235594) found that mobile payments have more than doubled in popularity, reaching over 33% of survey respondents. Of those that had made a mobile payment, more than half used PayPal Mobile (56%), with Amazon Payments and Apple's iTunes service statistically tied at about 40%. In addition, prepaid cards showed strong growth, particularly in the network branded and benefit submarkets.
Additional key findings include:
- Network-branded (open loop) prepaid cards have drawn neck and-neck with closed loop cards in consumer penetration. Strength was seen in all categories, including benefit and payroll cards. This could reflect economic and regulatory factors, as well as better marketing by banks and independent issuers.
- For the second year in a row, both biller and bank-operated online bill pay sites were used by more than 50% of the respondents. Overall, 73.5% of U.S. consumers now use online bill payment. This confirms that online bill payment is now the dominant way we pay bills in the U.S.
- Despite the popularity of digital downloads, such as apps and music, more respondents reported buying physical goods with their phones than online services, digital goods, or virtual currency.
IDC Financial Insights emphasizes the strong results in prepaid cards and mobile payments should lend urgency to financial institutions' efforts to develop products in these areas. Demand is clearly there, and banks need to make sure they are not left behind by non-banks that are more narrowly focused on the opportunity.
In addition, reward programs are one of the strongest areas for banks to build upon, because banks already sit between most commercial transactions, and thus have the best data of any competitor. Banks also have a long history of offering rewards on their cards, and of working with retailers on cross-promotions. With the limits on debit card interchange creating a revenue gap, targeted offers offer a replacement revenue source, and can also anchor ventures in the prepaid and mobile payments markets.
In May 2012, IDC Financial Insights conducted a nationally representative survey of U.S. consumers focused on usage of emerging payment technologies. While the 2011 survey noted that the severe recession and financial crisis depressed adoption of several payment technologies by both financial institutions and consumers, the results this year were more in line with historic trends, and mobile payments in particular have become vastly more common. As a result, this year, IDC Financial Insights was able to expand the number of mobile payment questions to garner additional insight into how consumers are using them.
“Based on our results, we expect to see continued growth in open-loop prepaid cards and mobile payments next year, and believe that the improvements being offered in electronic bill delivery will break electronic bill presentment and payment (EBPP) out of its doldrums as well,” said Aaron McPherson, Practice Director, IDC Financial Insights. “The advent of new card-linked offer programs should increase the influence of rewards on the average consumer, however, this will depend on how many banks choose to move ahead aggressively with these programs, and how many merchants choose to support them.”
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About IDC Financial Insights
IDC Financial Insights assists financial service businesses and IT leaders, as well as the suppliers who serve them, in making more effective technology decisions by providing accurate, timely, and insightful fact-based research and consulting services. Staffed by senior analysts with decades of industry experience, our global research analyzes and advises on business and technology issues facing the banking, insurance, and securities and investments industries. International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology market. IDC is a subsidiary of IDG, the world’s leading technology, media, research, and events company. For more information, please visit www.idc-fi.com, email firstname.lastname@example.org, or call 508-620-5533. Visit the IDC Financial Insights Community at http://idc-insights-community.com/financial.
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