The use of in-store mobile payments has been increasing steadily since 2012, when only 3% of U.S. adults had ever used mobile payments in stores, according to data from a recent Insight report from Mercator Advisory Group’s CustomerMonitor Survey Series, Mobile Payments Is Really Here. In 2012, Starbucks mobile payment app had been in use for over a year and other retailers were beginning to take notice. Mercator consumer research finds that 7% of U.S. adults had ever tried in-store mobile payments in 2013, a percentage that nearly doubled to 13% by 2014 and 14% by 2015.
Consumers who use mobile payment do so often. In fact, Mercator’s June 2015 Payments survey finds that 7% of U.S. adults have used mobile payments in stores at least once a week, including 2% who reported using in-store mobile payment 10 or more times in the previous month. Apple Pay users are using in-store mobile payments even more often than average in-store mobile payment users, since Apple Pay can be used in more stores than many other in-store mobile payment apps, particularly those specific to particular retailers. Yet, Apple Pay is far less accessible than traditional payment forms in terms of both consumer ownership of Apple iPhone devices that support the app and Near Field Technology (NFC)-equipped merchant payment terminals.
In-store mobile payments is undoubtedly poised to take off, considering that 50% of current mobile payers have used mobile payments in stores at least 4 times a month (once a week) and 16% report using it at least 10 times or more in the previous month.
Young adults are driving U.S. in-store mobile payment use, particularly 25-34 year olds (40% of those who have smartphones, or 36% of all 25-34 year olds) compared to only 14% of 18-24 year old smartphone owners and 13% of all 18-24 year olds), 15% of 35-64 year old smartphone owners or 11% of all 35-64 year olds), and 3.5% of adult smartphone owners age 65 and older and 1% of all seniors who have used in-store mobile payments.
The Global Mobile Consumer Survey released by Deloitte in December 2015 reveals that 18% of U.S. adults used mobile payments in stores in 2015 (up from 5% in 2014) compared to 13% of U.K. adults (up from 3% in 2014) and 8% of French consumers (up from 5% in 2014). This means that fewer U.K. consumers and even fewer French consumers responding to Deloitte’s survey have used mobile payments in stores than have the U.S. consumers responding to Mercator Advisory Group’s June 2015 CustomerMonitor survey, which found that 19% of U.S. smartphone owners have used mobile payments in stores and 14% of all U.S. adults have done so.
Retailers and merchants in the United States appear to place greater emphasis on mobile payments than do their counterparts in other countries. Starbucks now generates 20% of its revenues from mobile payments, primarily through its own app introduced in 2011, which can only be used in Starbucks stores. Since the success of Starbucks’ app, many U.S. retailers now offer their own mobile payment apps. These are primarily quick service restaurants, gas stations, and public transportation organizations, but increasingly department stores, entertainment, and other types of retailers.
Apple Pay was launched in the United States in October 2014, but not until July 2015 in the United Kingdom. Similarly, Android Pay and Samsung Pay went live in the U.S. in September 2015, but neither is currently available in the rest of the world. While neither Android Pay nor Samsung Pay was available at the time of the Mercator and Deloitte surveys, U.S. consumers clearly had more choices for in-store mobile payments than did consumers in other global markets.
When a robust, secure mobile payment app is accessible and retailers begin to accept mobile payments via these apps, we expect to see more broad-scale use of mobile payments for its added convenience, especially if these programs can be implemented with loyalty programs or other shopping applications, as Walmart has recently announced for its U.S. operations.
For more information on consumer use of mobile devices for making payments and for shopping online and in stores, data on related payment features (including e-couponing, e-receipting, e-loyalty as well as payment, balance, and fraud alerts), experience with Apple Pay compared to payment cards, and consumers’ ownership, plans to purchase, and important features of wearable technology for payments, please refer to Mercator Advisory Group’s CMSS Insight Report, Mobile Payments Is Really Here, which is based on an online survey of 3,000 U.S. adults reflective of the U.S. Bureau of the Census demographic profile and accessible by CustomerMonitor Survey Series members.
