Half of U.S. Adults Order Ahead for Pick up in Stores
As mobile technology continues to gain mass appeal and near full penetration in more segments, consumers rely on their smartphones to access and share information to manage their everyday lives and financial lives. Mobile shopping is becoming a normal behavior for most U.S. consumers, who find it useful for price comparisons and learning more about products of interest even when they are in stores. Online shopping is competing with shopping in brick-and-mortar stores. E-commerce and m-commerce sales are rising, and online retailers have become more competitive, resulting in more bankruptcies and closings of brick and mortar stores. With the introduction of Apple Pay in September 2014 using Near Field Communication (NFC) technology, growing use of mobile payments was widely anticipated. Samsung Pay and other new entrants in late 2015 expanded the base of mobile payments using Magnetic Secure Transmission (MST) offering universal mobile payment solutions for a broader range of smartphones for use in stores and online.
The proliferation of mobile technology as well as online and mobile banking had piqued consumer interest in many forms of mobile payments. With all the hype over several years, however, consumers appear to be losing interest in some of these new mobile payments. Young adults continue to drive use among a broad range of mobile payments in stores and online.
Mobile payers are inherently oriented toward rewards or incentives delivered via their smartphones, but they require more than a convenient way to pay if they are to engage in consistent use mobile payments at store checkout terminals. Consumers participating in our 2017 CustomerMonitor Survey Series survey keep reminding us that they want mobile payments to do more than just pay for items, no doubt because traditional payment cards can do that quickly and now have the security of an EMV chip. Consumers want more of an incentive to use mobile payments, given that traditional payment methods in stores still work easily, for the most part, as consumers have gained familiarity with the dip-the-chip card EMV process. Even online, fewer consumers are interested in loading a new mobile payment app to pay if there are no other benefits to its use. Greater value is needed for widespread adoption.
The aims of the survey analyzed in this Mercator Advisory Group Insight Summary Report, Mobile Payments: Greater Value Needed for Widespread Adoption
, are, first, to determine which customer segments are most likely to use mobile payments and, second, to identify some critical success factors needed for mobile payments to reach significant mass, the processes that consumers and merchants will adopt for mobile payments, shifts in the payments landscape, interest in new forms of mobile payments, and challenges to adoption.