Mobile Payments Use in the U.S. Lags

Ability to Repay for Payday Loans: Damned If You Do, Damned If You Do Not

A recent article in Yahoo Finance reports that mobile payments use in the United States lags behind other countries, particularly China where they cited an eMarketer report that suggests that 25% of smartphone users in the United States expect to pay for goods and services by mobile phone compared to 78% of smartphone users in China. This is true despite rising U.S. merchant acceptance of mobile payments. The article says Apple claims that half of U.S. merchants now accept Apple Pay.

  CEO Dan Schulman noted in March that Chinese users of payment apps WeChat Pay and Alipay open those apps 30 to 40 times a day, while PayPal customers only use the apps 30 to 40 times a year.

According to Mercator Advisory Group’s recent report on the Asian Mobile Payment Apps: Mobile payment adoption grew in China and India, for example because the digital payment methods were a better way to pay in cultures where payments were handled almost entirely in cash. Consumers in China and India rely on their mobile payment apps to manage much of their lives and often depend upon them for payments with fierce loyalty to their chosen apps. The Indian government’s surprising and sweeping demonetization in 2016 created a surge of demand from consumers to use smartphones to transact business and pay for goods and services. China’s politically influenced economy and tolerance for powerful companies—whether state-run or corporate—set the stage for Alipay and WeChat Pay to dominate in that country.

In the U.S., Mercator Advisory Group’s CustomerMonitor Survey Series has found that half of U.S. consumers use their mobile phone to make payments either online or in stores, but its use is lackluster, except for a small segment of avid users, whose use is increasing. Merchant-based mobile apps appear to have broader appeal today than universal mobile payment apps, perhaps because of their support and integration of loyalty and rewards programs that stimulate use, such as Starbucks and features that improve customer experience.  Mobile order and pay is a real benefit to many consumers as 47% of consumers and 65% of young adults say they have used mobile order and pay. Mobile payment will gain adoption when the benefits are clearly defined promoting its use.

Overview by Karen Augustine, Manager, Primary Data Services at Mercator Advisory Group

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