Number 9 • 2013
Vantiv Points Insights on Payment Trends
Retail Tablets Lead the Way to Mobile Adoption Mobile payments are beginning to take hold, but their widespread use hinges upon developing wider infrastructure and overcoming significant consumer security concerns.
As mobile payments take hold, the line between electronic and brick-andmortar worlds is blurring. ACTUAL USAGE OF MOBILE PAYMENTS Tap/wave mobile phone at checkout to pay 1% 2%
That is one of the key findings of this year’s Vantiv Insight Series research, which explores consumer attitudes toward mobile payments and how those methods are starting to alter the consumer retail experience. The results show that mobile technology is having an impact on the way people shop—and blurring the traditional lines between the electronic and brickand-mortar retailing worlds.
Swipe credit/debit card through reader on clerk’s tablet 17% 19% Pay for landscape/plumbing by swiping card on contractor’s phone 5% 6% Using “contactless” credit/debit by tapping it at checkout 4%
For merchants, this reality means having to do more than simply interact with customers in various channels. It means adopting what Vantiv calls an “omnicommerce” perspective—a holistic approach that delivers a consistent and appropriate customer experience across all channels. Omnicommerce presents new challenges for merchants, but it also has the potential to help them stay in close touch with consumers through the entire end-to-end buying process.
3% Pay at online retailer using mobile web or app on smartphone 4% 7%
0%
5% ■ 2012
10%
15%
■ 2013
20%
Vantiv Points
Number 9 • 2013
Consumers Are More Aware KEY TAKEAWAY: Consumers are more aware of mobile payments, and they are particulary familiar with in-store tabletbased methods. THE NUMBERS: This year, 59% were familiar with the concept of using a contactless mobile phone for payments, up from 51% last year. In terms of usage, retailer tablets are the most common mobile payments form, with 1 in 5 consumers having used them. Beyond tablets, however, consumers still have relatively little actual experience with mobile payments; only 2% have used a contactless mobile phone at checkout.
The Future is Bright KEY TAKEAWAY: Consumers expect mobile payments to be in widespread use in the near future—and many expect to be using the technology themselves. THE NUMBERS. Today, 66% of respondents think mobile payments will be common within five years, up from 62% in 2012, and 36% expect it to be common within two years, up from 31%. In terms of usage, 14% expect to prefer mobile payments for small in-store purchases five years from now, and 12% expect to use them for large purchases. Consumers also like the idea of using tablets to pay at restaurants, with 27% expressing interest and 13% expecting to be doing so regularly in five years.
Consumers Are Concerned— But Open to Change
Insights on Payment Trends
in mobile payments. That concern is aggravated by security myths, with 63% of consumers believing that mobile payments signals are easily intercepted by criminals. But there are ways to ease that concern: 69% percent of consumers expect that the “zero liability” that comes with their credit cards will be extended to mobile payments. Forty-four percent would switch from their current preferred payment type to mobile or other methods to receive a discount on a purchase. And 34% would be likely to switch for rewards similar to those that come with their plastic cards.
The Mobile Shopping Experience Is Here KEY TAKEAWAY: While mobile payments usage is still low, consumers are quickly incorporating smartphones and tablets into their shopping behavior. THE NUMBERS: Online research and purchasing of products over $50 has become more common than in-store shopping and purchasing without online research (56% and 46%, respectively). Nearly half said they have conducted research online before making an instore purchase. And 28% said they regularly use “showrooming”—finding a product in a store, using a mobile device to search online for the cheapest price, and then buying the item online or in another store. The challenge for merchants will be to provide mobile payment solutions at a pace that matches consumer appetites.
Appealing to Key Consumer Segments Interest in mobile payments varies by demographic group— and it is relatively strong among high-value consumers. For example, consumers earning $100,000 a year or more have the highest level of awareness of phone-based mobile payments (71% vs. 59% for consumers in general). And this group of higherincome consumers is also more likely to think that mobile payments will be common within five years (74% vs. 66%). Younger consumers age 18-34 are also interested in mobile payments, with 78% thinking they will be common in five years. They are also most likely to see themselves using mobile payments regularly (59% vs. 39% for consumers in general). ©Copyright 2013 Vantiv LLC. All rights reserved. Vantiv, the Vantiv logo, and all other Vantiv product or service names and logos are registered trademarks or trademarks of Vantiv, LLC in the USA and other countries. ®Indicates USA registration. Source: Vantiv/Mercator Insight Series Research, February 2013
KEY TAKEAWAY: Consumers worry about mobile payments security, but there are ways to overcome concerns. THE NUMBERS: Security issues top the list of factors dampening interest
Number 9-2013