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Rosie Murray-West
By
May 30, 2019

Mobile Payments: Too Much Confusion, Too Many Options

  finance

mobile payments banking

The granddaddy of mobile payment technology, PayPal, is now 21 years old — but customers are still confused about the different types of payment technology available, and use of this tech is fragmented, particularly among the older generations.

 


 

Figures from Consumer Intelligence, which surveyed 1000 people in May this year, found that many customers still prefer to pay with a physical plastic card, while well over a third agreed that they were confused by the number of different payment technologies available.


“Mobile payment is evolving fast, but our studies show that consumer knowledge is failing to keep pace, particularly among older people,” says Andy Buller, Key Account Director for Consumer Intelligence. “Companies who want to bring customers along for the mobile payments ride must be clear about what’s available, how it works with existing technologies and why it is better than existing plastic cards, if they are to convince people to give mobile technology a try.”


The Consumer Intelligence study showed that, although many people used technology other than typing in a credit or debit card number when they shopped on line, far fewer used this type of tech when shopping in physical stores.


59% of people have never paid at a physical point of sale using a smart watch or an an app on their mobile phone. Of those who had, the greatest number had used the technology in a shop, while restaurants, bars and public transport were other popular places to put this technology to use.

 

Have you ever paid for something at a physical point of sale using a smart watch or your mobile phone?

 

In a shop

29%

At a restaurant

18%

At a bar

15%

On public transport

14%

At the cinema or another leisure activity

13%

Somewhere else

1%

No - never

59%

Total

100%

 

The study revealed a striking generational difference when it comes to paying with a phone or smart watch. While 59% of the entire population had never used that technology, this dropped to just a third of people under 35, while nearly three quarters of those aged between 55 and 64 had never used the technology.

 

Percentage who have never paid with a smart watch or phone in a store by age

 

18-24

25-34

35-44

45-54

55-64

34%

33%

49%

67%

73%

 

For those paying in a physical store with payment technology, the study revealed two leading apps; PayPal and Apple Pay. PayPal is used by just over half of the market, with Apple Pay taking a further 43%. However, the study shows that many respondents use more than one technology, with Google Pay and Samsung Pay, also used by over 20% of respondents.


“Many customers seem to be using more than one app to pay,” Andy Buller says. “This is characteristic of a market that hasn’t yet settled down.”

What payment technology did you use?

 

PayPal

52%

Apple Pay

43%

Google Pay

26%

Samsung Pay

21%

Venmo

8%

Other- please specify

6%

 

Although many people seem happier to use payment wallets and other types of payment technology when shopping online, it’s clear that most of this usage is due to the prevalence of PayPal. Over 80% of people use PayPal when shopping online, with the nearest rivals  Apple Pay and Google Pay  taking 13% and 12% market share respectively.


“It’s clear people feel comfortable with PayPal, which is now embedded in many online channels, and has been for many years,” Andy Buller says. “It is surprising that Apple Pay and Google Pay are yet to make much of an impression on its market share.”

 

When shopping online, do you ever use any of the following digital payment methods which don’t involve using a traditional debit or credit card payment?

 

PayPal

81%

Apple Pay

13%

Google Pay

12%

Paym

4%

PingIt

3%

Facebook Pay

4%

Shopify

5%

Zapp

2%

Another digital technology not listed here – please specify

1%

None of the above

12%

Total

100%

 

PayPal also dominates the charts when it comes to sending money to family and friends, although it is clear that traditional bank transfers are still popular - especially now it is so easy to make them through a mobile app. 60% of respondents still send money through a bank transfer, and a further 6% use cash. Over a third use PayPal, while apps such as Apple Pay, Paym and Pingit are used by 5% or fewer people.


“It’s easy to use a mobile to send money with your bank account, and our study suggests many do,” Mr Buller says. “It may be hard to persuade people that new apps are more convenient.”

 

How do you usually send money to family and friends

 

PayPal

36%

Bank transfer

60%

Apple Pay

5%

Only physically (cash)

6%

Paym

4%

PingIt

4%

Facebook Pay

3%

Venmo

3%

Zelle

2%

Another way – please specify

5%

I never send money to friends / family

15%

 

New apps have sprung up recently to send money abroad, and the study shows that these are becoming popular. PayPal is used by 60% of respondents, far overtaking the traditional method of sending money: Western Union. Cheques and bank transfers were cited as another way by the 27% of people who did not use any of the technologies listed in the survey.

 

Do you ever send money abroad?

 

Yes

29%

No

71%

Total

100%

 

How do you send it?

 

PayPal

60%

Western Union

35%

Venmo

7%

WeTransfer

15%

World Remit

12%

Azimo

8%

Another way – please specify

27%

 

Respondents seemed to be looking more for convenience when it comes to payment technologies, rather than value for money. 53% neither agreed nor disagreed with the statement that these apps give value for money, with only 23% agreeing. Over half agreed that app payment was convenient.


Most seemed unworried by the safety of the apps, with only 18% disagreeing with the statement ‘paying by app is safe’.

Do you agree with the statement - apps give me value for money when paying online or in stores?

 

Strongly disagree

10%

Slightly disagree

13%

Neither agree nor disagree

53%

Slightly agree

17%

Strongly agree

8%

 

To what extent would you agree or disagree with the following statements? Paying with an app is convenient?

 

Strongly disagree

4%

Slightly disagree

7%

Neither agree nor disagree

32%

Slightly agree

30%

Strongly agree

27%

 

To what extent would you agree or disagree with the following statements?  Paying with an app is safe

 

Strongly disagree

5%

Slightly disagree

13%

Neither agree nor disagree

42%

Slightly agree

26%

Strongly agree

13%

 

Nearly 40% of respondents said they were confused by the number of payment technologies available, with 11% strongly agreeing with this. Well over a third would like a single app that they could use for all payments.


“The payment technology market is still fragmented,” Andy Buller says. “Many people would be less confused if one app provided good value for everything, and would welcome a merging of technologies for paying online, in store, and for bank transfers.

To what extent would you agree or disagree with the following statements?   I am confused by the number of payment technologies available?

 

Strongly disagree

13%

Slightly disagree

20%

Neither agree nor disagree

29%

Slightly agree

27%

Strongly agree

11%

 

To what extent would you agree or disagree with the following statements?   I would like to be able to use a single payment app for paying friends, in store, and abroad

 

Strongly disagree

10%

Slightly disagree

12%

Neither agree nor disagree

40%

Slightly agree

23%

Strongly agree

14%

 

At present, paying with a phone or smartwatch is far from a mainstream pursuit, with the survey revealing that over 60% of people prefer to pay with a physical card or cash. The percentage fluctuates depending on age, with a greater percentage (67% of 55-64s), agreeing with this than in younger age groups (46% of 18 to 24s).

To what extent would you agree or disagree with the following statements?  I prefer to pay for things with a physical card/cash rather than using my phone or other device

 

Strongly disagree

5%

Slightly disagree

11%

Neither agree nor disagree

24%

Slightly agree

27%

Strongly agree

34%

 

“Payment technology itself may be advanced, but our survey shows that customers are yet to embrace it fully,” Andy Buller says. “Making it convenient, clear and cross-channel will be help more consumers begin to use mobile payments, while our study also suggests there are currently too many players in the market. Consolidation may begin to make it easier for consumers to move away from physical plastic.”

 


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With an ever-increasing number of Fintech providers in the space and a growing appetite for innovation, it has never been more important for transfer providers to fully understand their market and customers in order to drive and retain a competitive advantage.

 

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