Report: More than a third of U.S. residents use mobile payments
11 July, 2012
category: NFC
Mobile payments have more than doubled in popularity over the past year to reach over 33% of U.S. residents, according to IDC Financial Insights’ eighth annual Consumer Payments Survey.
Of those survey respondents that had made a mobile payment, more than half used PayPal Mobile (56%), followed by Amazon Payments and Apple’s iTunes at about 40% each. In addition, prepaid cards showed strong growth, particularly in the network branded and benefit submarkets.
Additional findings of IDC’s report, “Business Strategy: Results from the 2012 Consumer Payments Survey,” include:
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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.
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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, confirming that online bill payment is now the dominant way to pay bills in the U.S.
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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.
According to IDC, the results of the survey clearly demonstrate consumer demand for prepaid cards and mobile payments, and should lend urgency to financial institutions’ efforts to develop products in these areas.
“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,” commented Aaron McPherson, practice director at IDC.
The report also found that rewards programs are one of the strongest areas for banks to build upon. According to IDC, 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.
“The advent of new card-linked offer programs should increase the influence of rewards on the average consumer,” added McPherson. “However, this will depend on how many banks choose to move ahead aggressively with these programs, and how many merchants choose to support them.”