Mobile pay is rising in popularity, but consumers prefer some programs over others.
More than 1,000 men and women were polled between Dec. 1-5, 2015 for Retale’s its second annual commissioned study which examined consumer interest and adoption of in-store mobile payments during the holiday shopping season. The study focused on several key areas, including the benefits, challenges and preferred usage of mobile payments.
According to the 2015 report, 43% of respondents have previously used a mobile device – smartphone, tablet or smartwatch – to make a purchase in a brick-and-mortar retail store. This is a 7% increase year-over-year compared to the 36% who reported they had used mobile pay in Retale’s 2014 study.
Indicating similar growth, when asked if they would be interested in using a mobile device to pay for a gift or other item in a retail store during the holiday shopping season, 61% of shoppers polled this year said that they would, an increase from the previous year’s 56%.
Correspondingly, when asked if retailers should offer some kind of mobile payment option in-store at checkout, 63% say in 2015 that they should, whereas in 2014, that number was 6% lower – only 57%.
“The embrace of mobile pay has been slightly slower than many originally anticipated,” said Pat Dermody, president of Retale. “But the growth that we’re seeing is undeniable, especially over the holidays, when consumers seek out the best tools to streamline and simplify their shopping. For many, mobile pay is a big advantage at checkout, and that’s building strong consumer support and propelling adoption upward.”
83% of shoppers this year felt that mobile payments were “convenient,” while 17% called them “inconvenient.” In 2014, only 76% of respondents described mobile payments as “convenient,” versus 24% saying they were “inconvenient.”
“Mobile payments aren’t as cutting-edge as they were in 2014,” said Dermody. “Shoppers have had more time to become familiar with how to use these platforms, plus, overall adoption by both consumers and businesses has grown. More savvy users combined with much wider availability has boosted the perceived convenience of mobile pay.”
Year-over-year, the top-two greatest concerns to respondents about mobile pay in-store remained the same, with “data breaches and privacy” (59%) and “possible theft or loss of mobile device” (55%).
“Whenever we talk about payment methods at retail, whether they’re newer options like mobile pay or more traditional methods like credit cards, data privacy is always going to be the number one concern,” added Dermody. “From 2014 to 2015, that didn’t change and I don’t expect it to in 2016.”
In 2015, shoppers have grown more comfortable using mobile payments on pricier items. The number of respondents, 27%, indicated a willingness to spend on items between $50 to $250, a 7% year-over-year increase compared to the same question from the 2014 survey, when only 20% were comfortable with that range. Meanwhile, 63% said they would be most comfortable using mobile pay for items $50 and compared to last year’s 68%. Only 10%, however, said that they would be comfortable using mobile pay for a purchase over $250 – a drop of 2% year-over-year from the 12% of the 2014 study.
“As adoption has increased and in-store mobile payments have normalized some, we’re seeing spending amounts at the middle of the spectrum rise,” said Dermody. “In the years ahead, we’ll likely continue to see erosion at the bottom, in the $50 range, with purchases over that amount becoming more common.”
This year, when asked what they were most likely to purchase with on-site mobile payment over the holiday season, the top-three selections were clothing (44%), food (41%) and gift cards (30%).
PayPal Still Beating Apple Pay
In 2015, when asked to identify the mobile payment service they would most likely use in-store, half (50%) mentioned PayPal. “Your bank’s mobile payment app” was the runner-up, with 27%, followed by Apple Pay, at 20%. In 2014, the top-three ranking was identical. Android Pay (17%) and a retailer’s app (13%) round out the top-five this year.
“PayPal and mobile banking apps still own the mobile payments market,” said Dermody. “As shoppers grow accustomed to using services like Apple Pay and Android Pay, those numbers will shift, but there might be too much fragmentation to drive significant increases, at least in the short-term.”