Mobile payments in the UK were gaining momentum as growing smartphone ownership, widespread app usage, and an established mobile banking market changed how consumers approached everyday transactions. Research from VocaLink found that 20% of British consumers were already making mobile payments, while another 30% expressed interest in doing so in the near future. Adoption was particularly strong among younger consumers, with payments ranging from sending money to friends and family to paying for parking and purchasing groceries.
The findings also highlighted an important competitive advantage for traditional financial institutions: consumer trust. Despite dissatisfaction with some aspects of banking, many consumers indicated they would prefer mobile payment services provided by their banks rather than other companies. Combined with the UK’s Faster Payments infrastructure, that trust presented banks with an opportunity to strengthen their digital relationships by integrating payments more deeply into mobile banking experiences.
British consumers adopting smartphones has led to a sharp increase in mobile payments, according to a survey from United Kingdom payment-network operator VocaLink. Some 20 percent of British consumers already are conducting mobile payments while 30 percent of those surveyed are interested in conducting mobile payments in the near future.
Some 41 percent of young adults between the ages of 16 and 24 are most likely to conduct a mobile payment. Those respondents gave various reasons for making a mobile payment, including sending funds to friends and family, paying for parking, and shopping for goods at a supermarket.
From Finextra:
“The prolific growth in smartphone ownership and app usage, combined with an already established mobile banking market and the availability of Faster Payments, means we are entering a perfect storm for mobile commerce. Our research confirms there is prevailing consumer trust in the banks to provide this service,” said Paul Stoddart, Managing Director Strategy & Business Development at VocaLink.
Despite consumers’ frustration with many UK banks, the survey results suggest they still trust them to provide efficient and secure mobile-payment methods over other parties. Some 35 percent of consumers stated that they would be more likely to pay for items if a bank provided the mobile-payment service. Sixty-three percent of respondents already making mobile payments stated they would also trust their banks to provide this service.
With consumers clearly inclined towards mobile payments and preferring the service to come from a traditional financial institution, banks in the UK should seize the opportunity and provide both enhanced mobile banking and mobile payments services to their customers.
Mobile payments in the UK presented banks with an opportunity to capitalize on both changing consumer behavior and their position as trusted financial providers. As smartphones became increasingly central to consumers’ financial lives, demand for convenient mobile banking and payment capabilities was likely to continue growing.
Financial institutions that moved quickly could use mobile payments to deepen customer engagement while defending their position against emerging nonbank competitors. By combining trusted banking relationships with fast, secure, and convenient mobile experiences, UK banks had an opportunity to play a central role in the evolution of mobile commerce.
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