Mobile transactions are a growing category in a very real sense, with awareness of the various payment opportunities the category offers continuing to rise. What’s more, majorities of Americans indicate that tapping to pay could be useful across a broad gamut of retailers and service providers.
Though majorities of Americans do foresee tap-to-pay transactions eventually displacing cash or cards, few think this prospect is likely to become a reality within the next few years. However, a deeper dive among those Americans who’ve used mobile devices for payments, purchases or other transactions within the past 30 days shows generally high satisfaction rates.
These are some of the results of The Harris Poll of 2,221 U.S. adults surveyed online between February 11 and 17, 2015 and Nielsen’s Mobile Wallet Study1, a comprehensive online study of 3,606 U.S. mobile shopping, payment and/or banking users aged 18+ (interviewed in October 2014).
Experiences on the rise…
The percentage of both the U.S. general population in total and smartphone users in particular who have either experienced or witnessed various types of mobile transactions continues to rise, with some key points of growth including:
• Paying for a product or service by having a card swiped through an attachment on the seller’s smartphone, sometimes referred to as “Mobile vendor” type transactions (Growing among the general population from 25% in 2012 to 32% in 2013 and 36% in 2015/ among Smartphone users from 35% to 43% to 46%).
• Paying by tapping a smartphone against a special receiver at a store or other merchant, instead of using cash or a payment card (General population: from 13% to 17% to 20%/ Smartphone users: from 18% to 23% to 26%).
• Using a mobile device in place of a ticket, both in an airline, train, mass transit or other transportation setting (growing from 17% to 20% to 29% among the general population/ from 26% to 30% to 37% among smartphone users) and to get into a movie, concert or live theater performance (from 15% to 19% to 25% among U.S. adults / from 23% to 29% to 33% among smartphone users).
…and perceived usefulness is strong across a variety of points of service…
Also compelling is the majorities of Americans who feel mobile payments would be useful across a broad spectrum of points of service, with no clear “best” fit.
• Close to six in ten U.S. adults, and roughly two-thirds of smartphone users, feel mobile payments would be useful for public transit (61% of Americans and 68% of smartphone users), movie theaters (59%, 68%), “big box” retailers (59%, 65%), gas stations/convenience stores (59%, 65%), counter service restaurants (58%, 66%) and taxis/car services (58%, 66%).
• Strong percentages also feel such transactions would be useful at sports arenas (55%, 61%), local (individual or small chain) retail stores (55%, 62%), restaurants offering table service (54%, 61%) and bars (49%, 56%).
Looking more specifically at the tap-to-pay model, while exposure may be on the rise, interest doesn’t follow the same pattern when it comes to using a smartphone to process in-person payments instead of cash or cards. Interest among Americans as a whole, which dropped slightly in 2013 (from 27% in 2012 to 24% in 2013) has rebounded in an equally slight manner (back to 27%). Moreover, among the target market of smartphone users, interest – which fell from 44% in 2012 to 37% in 2013 – remains stagnant, still at 37% today.
Among those not interested, security concerns and a simple lack of compelling motivation are currently the top impediments to adoption.
• 56% of those not interested (64% among uninterested smartphone users) say they don’t want to store sensitive information on their phone, while nearly half (46%; 52% among smartphone users) don’t want to transmit such information to the merchant’s device.
• 54% of those not interested (60% among smartphone users) indicate that they simply don’t see any reason to switch from cash or payment cards to this new method.
Majorities of Americans anticipate tap-to-pay smartphone payments eventually replacing payment card (63%) and cash (57%) transactions (71% and 62%, respectively, among smartphone users) in the future – but not necessarily in the near future. Three in ten Americans (30%; 36% among smartphone users) believe such transactions will replace normal payment cards within the next five years, and one-fourth (26%; 30% among smartphone users) believe it will replace cash transactions in that timeframe.
However, growing percentages of both U.S. adults (43% vs. 41% in 2013 and 39% in 2012) in general and smartphone users specifically (38% vs. 34% and 30%, respectively) don’t believe that tap-to-pay transactions will ever replace cold, hard cash.