Mobile Payment Magazine

40% of US Mobile-Equiped Consumers Embrace Mobile Banking, Says Report

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A recent online survey of more than 2,000 respondents by YouGov Plc. and Antenna Software, Inc., showed that more than one in three US consumers with mobile phones, smartphones and tablets currently use mobile banking.  This presents both a major growth opportunity for retail banks to increase their customer base, as well as a chance for organizations with current mobile offerings to up their game with more advanced and “sticky” mobile apps for greater customer loyalty and competitive advantage. [Read more…]

NFC Mobile Contactless Payment Transactions to Reach $50 Billion Worldwide, Says Report

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A new report from Juniper Research forecasts that global NFC mobile contactless payment transactions will reach nearly $50 billion worldwide by 2014. Following on from the Orange Mobile Payments service launch in the UK, 2011 and 2012 are expected to be banner years for NFC service rollouts. [Read more…]

Younger Generation Will Drive Demand for Mobile Payments

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Increasingly, technology is changing what we consider possible, from unlocking a car from inside the house to recording a movie remotely. With this evolution, the mobile phone has become the most important technology accessory, with younger generations fueling this movement.

Consumers are now poised for the next step – using their smartphones as mobile wallets, according to a new survey by MasterCard Worldwide. The study, conducted by Kelton Research, shows 62 percent of Americans who use a mobile phone would be open to using their device to make purchases wherever their errands may take them.

“Consumers are already living a mobile lifestyle so using their phones to make payments on a daily basis is a natural next step,” said Mung-Ki Woo, group executive, mobile at MasterCard Worldwide. “2011 is the beginning of the NFC mobile payments era, and consumers are eager to get their hands on the first commercial deployments in the U.S.”

Defined as a mobile generation with its pulse on digital trends, 18-34 year-olds are particularly ready to take their transactions to the next level:

  • According to the study, 63 percent of 18-34 year olds would be at ease using mobile phones to make purchases versus those age 35 or older (37 percent).
  • Consumers ages 18-34 (65 percent) feel more naked without their phones than their wallets, compared to 34 percent of those in the 35 and older group.

In a separate 2010 survey conducted by MasterCard Advisors, respondents under 30 years of age showed this demand has also been building for the past few years. This group is increasingly hungry for mobile payment options and access to their funds:

  • Between 2009 and 2010, respondents showed a 67% increase (15% in 2009 to 25% in 2010) in the number of purchases made with their mobile phones.
  • In this time period, this audience also increased their daily mobile phone access to their bank’s online banking service by 79% (14% in 2009 to 25% in 2010).

Perception is Important

This growing willingness to use a mobile phone for payments supports the role mobile phones play as a reflection of personality, and consumers’ desire not to carry a traditional wallet. According to the study, consumers value mobile phones not just for the functions they can perform, but for what they say about them too. Over half (54 percent) of respondents think that someone’s phone is more telling of their personality than their wallet.

“When credit and debit cards were first introduced, consumers welcomed the improvements they made to the speed, convenience and reliability of transactions,” said Woo. “Now with the mobile wallet ready to revolutionize this experience again, consumers have even more to gain as their phones take on additional functionality and value in their lives.”

Gender Divides How Consumers Evaluate Mobile Payments

As the mobile wallet goes mainstream, gender will play a role in how it’s perceived and used. While men see their phones as functional necessities, women take a more personal approach to their mobile devices. According to the survey, men tend to be more willing to use their phones for payment transactions, and they perceive the transactions in a positive way:

  • More men than women (51 percent vs. 40 percent) who have a mobile phone would be at ease using it to make purchases.
  • More men than women (49 percent vs. 45 percent) would be impressed by someone who paid a bill with a mobile application than with a credit card.

While women are slightly more conservative about mobile phone purchasing decisions, they highly value the content stored on their phones:

  • Women more so than men (50 percent vs. 36 percent) feel more exposed without their mobile device than their wallets.
  • Of women, 45 percent (vs. 34 percent of men) would rather have their phones than their wallets surgically attached so they’d always remember them when leaving the home.

Trust and Privacy are Critical to Consumer Comfort

Despite reliance on mobile devices and general consumer readiness for mobile payments, the survey revealed that overall safety is a significant comfort factor in the decision to pay by phone. Nearly two in three respondents (62%) said they need confirmation that their personal information is safe in order to be comfortable making a transaction, underscoring trust and privacy as paramount factors in changing payment behaviors.

Survey Methodology

The MasterCard Mobile Survey was conducted by Kelton Research between April 15th and April 22nd 2011 via email invitation and an online survey. Quotas are set to ensure reliable and accurate representation of the total U.S. population ages 18 and over.

Source: Business Wire

PayPal, Apple and Nokia Lead in Mobile Payments Brand Trust

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Trust and familiarity are the key drivers in consumer preference for mobile payment services, according to a new study. The survey by GfK NOP, a global market research agency, covered nine countries (US, UK, France, Italy, Germany, Spain, South Korea, Brazil and China) and included 8,603 online interviews, with each country’s sample designed to represent their online population.

The findings revealed that what consumers are looking for, before they feel comfortable adopting a mobile payment service supplier, is the trust of a financial brand and familiarity of a mobile brand.

Consumer appeal for mobile payment services varies across all countries, which, broadly speaking, fall into two categories: countries with established financial payment infrastructures, and countries whose financial infrastructure is young and still developing.

Of the nine markets where research was conducted, South Korea was the only nation that offered established mobile payment services to the consumer market. Globally, 62% of consumers find mobile payments appealing. This is higher among certain key groups, including: younger consumers aged 16-24 (75%); innovators / early adopters (74%); and current smartphone owners (72%).

There is, however, considerable variation between nations. Developing markets in China (82%) and Brazil (73%) find mobile payment services the most appealing, whereas the more established payment systems in developed markets, like the US and Europe, mean appeal in these nations is more limited (around 50%), since the existing chip-and-PIN systems offer a convenient and already trusted route.

Why the delay in Mobile Payments?

Near Field Communications (NFC), the technology that supports close proximity mobile payment services, has been around for many years. However, the NFC-enabled mobile devices and service support have been delayed year on year. Why, when the service seems so attractive to consumers and businesses alike?

One of the reasons for this delay to market is that there are so many brands from different industry sectors interested, posing the critical question: ‘Who should own the relationship with the customer?’ The incentive for financial institutions is that Mobile Payment embodies a critical evolutionary step. It will modernise their service offering and refresh their brand image – things that are much needed after the negativity of the recent financial crisis.  For mobile network operators, the attraction of this fledgling sector is the opportunity to diversify their revenue streams – to branch out from their core business of voice, text and data. And, for Smartphone handset and operating system (or OS) providers, mobile payment services represent an important new data source, that brings together online and offline purchasing behaviour – something that will enhance the value of their ecosystem to advertisers.

Working out how all these different companies work together, and – importantly – who owns the customer relationship, has been the key barrier to rolling mobile payment services out for most countries.

The adoption funnel: trust, consideration and preference

At a category level, GfK’s study shows that the financial brand category has the highest levels of trust, consideration and – importantly – preference among consumers (48%). Within this category, high street banks have the highest levels of trust, consideration and preference. Consumers feel they can be relied upon to safely process payments and manage personal finances, and view the move to mobile payments as a natural next step.

Mobile and telecommunication brands receive significantly lower levels trust, when it comes to controlling financial transactions (10%). Within these brands, mobile network carriers have the highest levels of trust, consideration and preference, although still lag behind financial brands. Within this category, mobile network carriers have the highest levels of trust, consideration and preference out of all the mobile brands, but they are still quite far behind financial brands. Adoption scores for network carriers, mobile handset and OS providers do, however, see significant uplift among smartphone owners, younger consumers and early tech adopters.

Consumer preference for mobile payments providers. Source: GfK NOP

At brand level, PayPal, Nokia and Apple came out very strongly, amongst the brands that we tested. PayPal has experience in delivering remote mobile payment services to consumers and boasts high levels of trust and consideration. Most interestingly, it has the highest brand preference of all those tested in this research. At a global level, trust usually drives mobile payment service preference. However, for PayPal, the drivers are completely different. The fact that consumers have already used PayPal to send or receive remote mobile payments before drives consumer preference for the brand when it comes to proximity based mobile payments. Closely following this familiarity of PayPal’s remote service (30%) comes the fact it is deemed a specialist in processing payments generally (21%).  Trust (17%) remains important for PayPal, but is only the third most important stated purchase driver.

 

Nokia in China is among the most trusted brands of any category in the research, receiving a score of 38% – much higher than its global average of 14%. The reason for this level of Chinese consumer preference is, again, trust – one-in-two people in China stated trust as the main driver of preference. Nokia has built a strong brand in China over the years, based on delivering reliable mobile solutions to a large proportion of the Chinese population.

Apple also has a very strong brand and this has driven higher levels of trust among their existing customer base – raising their global trust average of 11% to 38% among iPhone owners. Those that own iPhones are already used to using their iTunes account to pay for apps and media content, so the step to paying for physical products with their iTunes account is less of a stretch.

These three brand examples show that, whilst financial brands have built up high levels of trust, mobile-based brands such as Nokia and Apple, and relatively new financial brands like PayPal, have the potential to quickly disrupt this seemingly comfortable position.

Ryan Garner, Director in GfK Technology, comments, “Creating a mobile payment service that consumers are comfortable adopting means leveraging the trust placed in financial brands, but it is also vital to have a presence in the mobile sector. By tapping into all of these strengths, a mobile payments solution would quickly gain momentum with consumers and put an end to the delays experienced by NFC-based services in recent years.”

About the Survey

GfK conducted 8603 online interviews in the following countries; UK (n=853), US (n=1004), France (n=1000), Germany (n=999), Italy (n=1103), Spain (n=997), Brazil (n=987), China (n=659) and South Korea (n=1001)

The sample in each country was designed to be representative of the online population. In the UK, US, France, Germany, Italy, Spain and South Korea internet penetration is high enough to capture a sample that is broadly representative of the population as a whole. However, in China and Brazil the interviews collected online will not be representative in the same way. The research conducted in Brazil and China will be representative of the online population, but these people are more advanced in their views on technology, live in more urban areas and are likely to be wealthier, than the population as a whole.

Source: GfK NOP

Retailers Increasing Mobile and Social Sales and Marketing

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In an effort to better serve multi-touchpoint, always-on, and empowered consumers, a growing number of retailers are experimenting with mobile and social initiatives — some that are paying immediate dividends and some that are still in the speculative phase.

According to Forrester Research, 91 percent of retailers currently have a mobile strategy in place or in development (up from 74 percent a year ago). Additionally, 72 percent of retailers say they will increase their spending on social networks this year over last year.

The report, entitled “The State Of Retailing Online 2011: Marketing, Social, and Mobile,” surveyed 68 companies, and was conducted  by Forrester Research Inc. for Shop.org.

Mobile

Retailers report that 21 percent of all mobile traffic is coming from tablets, amazing considering the iPad was launched barely a year ago.

Still, the overall amount of mobile traffic and revenue has not increased dramatically, suggesting that investment levels in site optimization may still be inadequate. For example, 48 percent of retailers report having a mobile-optimized website; 35 percent have deployed an iPhone app; and 15 percent offer an Android app and an iPad app, respectively. Challenges for retailers include differentiating the consumer experience on a tablet versus a smartphone and figuring out features and functionality in dueling app/mobile Web ecosystems.

“After spending the last few years learning how to capitalize on social media and new mobile technologies, one of retailers’ main focuses right now seems to be leveraging the tremendous popularity of tablet devices, such as the iPad,” said Shop.org Head of Research Fiona Swerdlow. “As sales channels continue to blur in retail, companies are creating mobile apps that make their brands seem current, entertaining, or fun, while at the same time creating a unique opportunity to connect with more shoppers than ever before.”

Social

Compared with past years, social networks surfaced higher as an investment area among retailers. Social networks ranked fourth on the list of successful customer acquisition sources, up significantly from last year. Yet the ROI associated with social is muddy: 62 percent of retailers said the returns on social marketing strategies are unclear, and nearly the same percentage said the primary ROI from social marketing is listening to — and gaining a better understanding of — customers.

“The data indicates that significant investments in social and mobile tactics will be in place this year,” said Sucharita Mulpuru, vice president, principal analyst, Forrester Research. “Retail executives should have modest expectations for the benefits of social commerce. With regard to mobile, retailers should be working to increasingly integrate features and functionality into the physical store experience. While consumers may not be extensively exploring product information yet, basic store information, transparent pricing, and easy checkout capabilities are likely to be the most pressing opportunities for most sites in the near term.”

“The State Of Retailing Online 2011: Marketing, Social, And Mobile,” is available to Shop.org members and can also be purchased directly at www.shop.org/soro. Forrester clients will be able to access the report as part of their subscription service one month from publication.

Source: Forrester Research

Mobile Payments Enter A Disruptive Phase 2011

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While Near Field Communication has created a lot of buzz in the mobile payment industry, it is clear that there remain significant hurdles before the technology is standard in U.S. mobile commerce.

Forrester Research recently published a report: “Mobile Payments Enter a Disruptive Phase,” excerpted below:

The pace of innovation in mobile payments is accelerating. 2011 is finally the year when Near Field Communication (NFC) will reach the hands of millions of consumers, while initiatives in the digital micropayment arena are accelerating.

While we believe that mass-market adoption of mobile payments is still years away, new entrants — be they mobile operators, alternative payment providers, or online players — have the potential to disrupt existing payment systems. Consumer product strategy professionals should anticipate different disruptive scenarios and determine the likelihood of them happening.

To define the correct strategy, be it defensive or offensive, they need to measure the convenience of their new products and services. And, at a tactical level, they shouldn’t underestimate the need to educate consumers about new payment methods.

Table of Contents

  • Making Sense Of Mobile Payments
  • Mobile Payments Are Disrupting The Existing Payments Landscape
  • Mobile Payments: What Product Strategists Should Anticipate

Recommendations

  • Anticipate Different Disruptive Scenarios And Think About Convenience
  • Supplemental Material
  • Related Research Documents

More information: Forrester Research.

Global Mobile Software Market to Reach $79.7 Billion by 2017

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Proliferation of mobile computing devices, such as, mobile phones, laptops, palm computers, and the rise in the number of supporting platforms, such as, Android, has resulted in the development of several killer mobile software and applications revolving around device customization, internet connectivity, and other mobile computer related activities.

With mobile computing devices quickly transforming from an emerging niche market to a mainstream force, changing not only the way people conduct business, but arguably the consumer electronics and telecommunication industry as a whole, the global market for mobile software, a key enabler of these mobile devices continues to remain promising.

Growing popularity of mobile communication applications such as email, IM, mobile video, on device portals, Internet browsers, Internet web, and social network clients, multimedia applications such as presentation viewers, video players, audio players, graphics/image viewers, word processors, and spreadsheets, among others provides tremendous opportunities for global mobile software market.

Growing use of smartphones especially opens up the channel for development of innovative software and consumer applications, driving demand for next-generation mobile software. Top consumer mobile applications for upcoming years, including Location-Based Services, Money Transfer, Mobile Browsing, Mobile Health Monitoring, Mobile Search, Near Field Communication Services, Mobile Payment, Mobile Instant Messaging, Mobile Advertising and Mobile Music are all expected to drive present substantial market opportunities for mobile software market in the years to come. Location based services such as Location Enabled Search and Location based Social Network Services in particular are expected to increase in popularity over the next few years, thereby driving gains into the market.

The Asia-Pacific region is the most prominent regional market for mobile software. Growth in the Asia-Pacific mobile software market is particularly driven by growing craze for smartphones and other mobile devices in emerging markets such as China and India. Increased demand for mobile email and other Internet enabled services within the burgeoning corporate sector in these countries also augurs well for the market. User Interface (UI) and Applications represent the largest product segment, while Mobile Device Management (MDM) market represents the fastest growing product segment, waxing at a CAGR of more than 23% over the analysis period.

Major players in the marketplace include ACCESS Co. Ltd., Apple Inc., Electronic Arts Inc., Google Inc., InnoPath Software Inc., Microsoft Corporation, MFormation Technologies Inc., Nokia Corporation, Red Bend Software Inc., Research In Motion Limited, Smith Micro Software Inc., Sybase Inc., The Symbian Foundation, among others.

A new research report entitled “Mobile Software: A Global Strategic Business Report” has been released by Global Industry Analysts, Inc.,  The report provides a comprehensive review of market trends, issues, drivers, company profiles, and key strategic industry activities.

Market estimates and projections are presented for major geographic markets including North America, Europe, Asia-Pacific and Rest of World. Product segments analyzed include – User Interface (UI) and Applications, Application Execution Environment (AEE) and Operating System (OS) Software.

More information: Mobile Software: A Global Strategic Business Report

Source: PR Web

375 Million+ Mobile Payment Users by 2015, Says Report

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Mobile payments are an emerging opportunity to make payment from or with a mobile handset. While a success in certain countries and with fringe audiences already, mobile payments have not yet achieved success on a global scale. However, it is anticipated that this will begin to change in 2011 as the number of mobile payment users starts a significant run up from 116 million to over 375 million in 2015, according to a recent research report from In-Stat.

“There appears to be consumer demand for mobile payments,” says Amy Cravens, Market Analyst. “Consumers do recognize pain points with current payment systems and indicate support for a cleaner, easier alternative. If mobile operators are able to push beyond the infrastructural challenges and introduce these services to the mass market, the transactional value of the mobile payments market is positioned to grow nearly tenfold over the next several years.”

Recent research findings identify the market’s preparedness including:

  • Significant smartphone penetration.
  • Consumer comfort level with purchasing goods with their phone through existing channels.
  • A desire among mobile operators to develop opportunities to generate revenue from mobile based commerce.
  • Infrastructural developments supporting contactless payments, including NFC-enabled mobile phones and Point of Sale (POS) terminals.

The In-Stat report, entitled “Mobile Payments: Is the Market Ready?” examines the mobile payment market structure, outlining the various elements in this multifaceted market. Discussion will include mobile payment types as well as the relationships comprised in this complex ecosystem.

The report also includes:

  • Market player profiles including: Bling Nation, Boku, Clairmail, Isis, mFoundry, and Obopay
  • Forecasts for the mobile payments market through 2015
  • Forecasts of anticipated usage and transaction volume
  • Detailed examination of the NFC market
  • All forecasts extend through 2015 and are segmented by geographic regions

Source: MarketWire

Security Concerns Still Holding Back Mobile Payment Consumers in 2011

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Mobio Identity Systems, an international mobile payments and marketing company, today released a comprehensive report on mobile payment adoption and use in North America called “Mobile Commerce Handcuffs.”

The report contains findings from a survey distributed to North American consumers. The report reveals that 94% of respondents would make a mobile payment if they knew it was secure. There are numerous additional significant findings, which are supported with charts, graphs, and statistics. Overall, the report highlights the significance of security as a barrier to growth of the m-commerce market.

More information: Mobile Commerce Handcuffs – Report.

Source: MarketWire