I just searched the phrase “mobile wallet wars” in Google and it returned over 1.8 million results. Mobile wallet is officially buzzing. To be dubbed a war suggests a certain intensity as competitors make a mad rush for territory (a.k.a. consumers). A lot is being talked about in this realm, and action is being taken, too. Google teamed up with a few partners including Citi and MasterCard to introduce Google Wallet in May, and Visa announced its Mobile Wallet around the same time.
In Compete’s quarterly Mobile FS Intelligence survey, we seek to understand sentiment on the mobile channel and the mobile wallet specifically across the banking, credit card, brokerage, and auto insurance industries. In this blog, I’ll share a little bit on what we’ve learned about consumer interest in the mobile wallet.
Most Consumers Are Unlikely To Start Banking Or Buying With Their Mobile Device Soon
Two key questions that mobile project managers and marketers have are: How likely are consumers to use these services? And, if consumers are not interested in the current offering why not? Here’s a peek at what we saw when we asked over 1,200 financial product owners for their thoughts on the mobile wallet.
First, overall awareness of mobile wallet services is high averaging around two-thirds. Yet, the vast majority of consumers say they aren’t likely to start using mobile wallet services in the next three months. In fact, about two-thirds of deposit account and credit card owners who aren’t currently using mobile services say they aren’t planning to start anytime soon.
Just 7% of banking consumers indicated that they would be very or extremely likely to start using their phone or tablet to make a bill payment. And only 5% of banking consumers said they would be likely to start using their mobile device to make a deposit. Same goes for credit card consumers, most of whom say they aren’t likely to start managing their credit card or using their mobile device to make a point-of-sale purchase.
A lot has been made about the steep adoption curve of mobile devices, but we don’t expect to see the same steep mobile wallet adoption rates continue. One reason for this is simply that online banking paved the way for mobile banking, contributing to early, high levels of adoption by consumers who were already banking online. From the consumer’s perspective most of these services provide the same function, the only difference is where the function is conducted and the device on which it is conducted. (A bill payment on a laptop/desktop accomplishes the same thing as a bill payment on a mobile.) Thus, adoption rates will return to normal as mobile banking tries to entice consumers who aren’t yet online bankers.
Why Consumers Aren’t Going To Start Banking On Their Mobile Device
If you follow the news about mobile financial services, you know that the key barriers to mobile service adoption in financial services in aggregate include concern about security as well as a general feeling that there just isn’t a need to manage money on the go.
What we found when we separated financial services sub-industries – banking, brokerage, credit cards, and auto insurance – was that reasons for not adopting mobile changed depending on the context. For example, when credit card owners are asked to share their reasons for not adopting, top reasons were slow wireless connection (52%) and lack of need (48%). Contrary to popular belief, only 15% of credit card consumers responded that they didn’t trust the security of their mobile device in context. Though, 48% of card owners and deposit owners said they don’t have a need manage those accounts with a mobile device, so mobile marketers still need to find appropriate motivation for many.
The Good News: Mobile Money is Sticky
Although current use and intended adoption rates for mobile services are low, once consumers adopt mobile financial or money services and start using their phone as a mobile wallet, they use the services frequently. 16% of consumers using Mobile Tap and Pay do so daily and another 36% use it weekly. A full 87% of consumers using Mobile Couponing do so at least once a month!
And how about you? How likely are you to adopt the mobile wallet? Let me know, I’m interested.
Jennifer Johnston Canfield is a Senior Associate in Financial Services at Compete. Jennifer is responsible for providing competitive analysis to financial services clients. Before Jennifer joined the Compete team she was a social media marketing consultant. Connect with Jennifer on Twitter (@jbjcanfield) or LinkedIn (http://www.linkedin.com/in/jenniferjohnstoncanfield).