Mobile Payments Awareness Grows, Cash Use Declines; Consumers Demand More to Make the Leap to Mobile, Accenture Survey Finds
October 18 2016 - 8:57AM
Business Wire
Consumers say cash and plastic are fine for
their payments needs
Sixty percent of consumers in North America use cash at least
weekly to make purchases at a merchant location, down seven
percentage points from 2015 – the most significant decline in use
of traditional payment methods over the past year, according to a
new report from Accenture (NYSE:ACN). Awareness of mobile phone
payments increased four percentage points from last year to 56
percent, however the regular use of mobile payments remains flat at
19 percent.
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The report – the Accenture 2016 North America Consumer Digital
Payments Survey – is based on a survey of more than 4,000
smartphone users in the United States and Canada, and is the most
recent report in Accenture’s multi-year research on consumer
attitudes about how they want to pay now and in the future.
The survey found that even with the decline in cash use, cash
and plastic continue to be the most common payment methods. North
American consumers’ use of debit cards for payments in merchant
locations has remained consistent at 58 percent, while credit card
usage was up three percentage points from the previous year to 53
percent in 2016.
“We are seeing a gradual increase in consumer awareness of
mobile phone payments options; however, adoption has remained flat
over the past few years,” said Robert Flynn, managing director of
Accenture Payments in North America. “Consumers are content to use
cash and plastic for their everyday transactions, and while the use
of cash is declining overall, it is the most commonly used form of
payment – and consumers expect it to remain so in 2020. To shift
consumers’ payment behaviors will take more than just providing
another ‘me too’ mobile payments option; leading merchants will
identify and provide next-generation, value-added services.”
While the use of mobile phone payments at merchant locations
remains flat according to the survey, other digital payments are on
the rise – a trend that consumers expect to continue. Since 2014,
consumers’ use of PayPal has increased four percentage points to 18
percent in 2016. Consumers expressed optimism about mobile wallet
adoption in the future, expecting a nearly 60 percent increase in
the use of mobile wallets by card networks (from 14 percent in 2016
to 22 percent in 2020) and tech giants (from 13 percent to 21
percent in 2020).
“The existing payments system isn’t broken, which is why
consumers are not making a mass-move to mobile phone payments
adoption – the incentives are not there yet,” said Michael Abbott,
managing director of Accenture Digital, Financial Services, North
America lead. “Today’s mobile phone payments options provide basic,
first-generation functionality; it’s like running an Atari game on
an Xbox system – amazing underlying potential, but only providing a
very basic offering. Consumers expect more in today’s fast-paced
digital environment; just the ability to tap-and-pay is not enough.
Payments providers need to bring the traditional card to life and
create a real-time interactive experience for consumers.”
The survey identified barriers to consumer adoption of mobile
payments, which, if addressed, can provide first-movers with a
significant advantage. Of the nearly two-thirds (64 percent) of
consumers who have never used their mobile phone as a payment
vehicle at a merchant location, more than one-third (37 percent)
said they have not done so because they believe cash and plastic
are fine for their payments needs; while nearly one-in-five prefer
not to register payments credentials into their mobile phone (21
percent) or are concerned that unauthorized transactions may happen
(19 percent).
Consumers trust traditional payments providers the most and are
largely satisfied with digital payments transactions; however,
there are no clear winners yet. Nearly three-quarters (73 percent)
of North America consumers said they trust traditional card
providers the most as their mobile payments provider, followed by
alternative payments providers like PayPal (63 percent),
established retail banks (62 percent) and large tech companies (59
percent). Of those consumers who have used mobile payments apps in
store, consumers most frequently used their bank’s mobile app (26
percent), and 76 percent expressed satisfaction with this
experience.
Millennials and Mass Affluents: the Path to Adoption
Millennials and mass affluent individuals (earn $100,000
annually after taxes) are natural segments to target for payments
providers, leading adoption trends in digital and mobile payments
and self-proclaimed early adopters for the next wave of payments
technology. More than half of both groups (52 percent) consider
themselves to be among the first to try new technologies. Nearly
one-third of millennials (30 percent) and mass affluents (35
percent) are extremely interested in initiating payments
transactions using wearables (e.g. watch, etc.) or smart devices,
such as a refrigerator or car.
Flynn concluded, “Millennials and higher income individuals may
be low-hanging fruit for payments providers looking to increase
adoption, but there is also a vast amount of untapped opportunity
with consumers who are becoming more familiar with digital
technologies and the rewards and convenience it affords. As open
banking becomes more prevalent, driven by APIs, consolidated
customer data will provide a full picture of the customer, giving
payments providers the information they need to create unique and
differentiated offerings. Winning in mobile payments is anyone’s
game at this point.”
While millennials and mass affluents are leading the adoption
charge, the survey found that consumers overall are becoming more
open to considering digital payments options. One-in-five consumers
are interested in using wearables (21 percent) or smart devices (20
percent) to initiate payments, a two and three percentage point
increase, respectively, from 2015. Consumers expressed the most
interest in the ability to park their car and have the car
automatically pay for parking (30 percent).Today, nearly
one-in-five consumers (21 percent) are extremely comfortable
linking personal data with different ways to pay for faster
authentication and one-step checkout, and nearly two-in-five are
comfortable providing online bank account credentials to
third-parties.
Methodology
The survey was conducted by Accenture Research among 4,000
adults in the United States and Canada between July 6, 2016 and
July 22, 2016. The overall margin of error is +/- 1.55 percentage
points at the midpoint of the 95 percent confidence level.
About Accenture
Accenture is a leading global professional services company,
providing a broad range of services and solutions in strategy,
consulting, digital, technology and operations. Combining unmatched
experience and specialized skills across more than 40 industries
and all business functions – underpinned by the world’s largest
delivery network – Accenture works at the intersection of business
and technology to help clients improve their performance and create
sustainable value for their stakeholders. With approximately
384,000 people serving clients in more than 120 countries,
Accenture drives innovation to improve the way the world works and
lives. Visit us at www.accenture.com.
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AccentureMelissa Volin, + 1
267-216-1815melissa.volin@accenture.com
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