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Millennials to take lead in mobile payment adoption

Monday 1 August 2016 | 15:07 CET | Background

Urban Airship conducted a survey among 1,000 US and 1,000 UK consumers with an iPhone or Samsung smartphone during early June 2016. Its sample showed an above average usage of mobile wallets, with more than half of those surveyed (54%) having already used a mobile wallet pass in one form or another. Especially among the younger set and those with above median household incomes (USD 60k+), usage was more widespread. Millennials were more likely to have used a wallet pass in the last three months, and have employed them for more uses, at 67 percent compared to 51 percent of Generation X respondents.

Overall U.K. mobile wallet adoption was lower, with 63 percent of respondents from the U.S. having used a pass vs. 45% percent in the UK , but according to Urban Airship this may be because of Apple Pay and Android Pay having launched later in the UK.

Mobile wallet will be driven by extra services

Urban Airship states that the future of mobile payments will be driven by mobile wallet usage in other areas. They showed that already 55 percent of their respondents were likely to use their phone to pay for things at the checkout. That likelihood rose to 73 percent if loyalty discounts and offers would have been automatically applied, an increase of 32 percent.  These numbers were still larger for households with lower incomes, who are 42 percent more likely to pay via mobile phone when loyalty discounts and offers are automatically applied.

Overall, 69 percent of respondents said they were more likely to use the loyalty card if it’s on their phone, especially true for Millennials (82%) and households with higher incomes (78%). Furthermore, the biggest problems with loyalty program participation (forgetting they’re members (40%) and forgetting the card (43%)) can be solved by using mobile wallet for loyalty membership believes Urban Airship.

Their research also showed that consumers like mobile wallets as a way of keeping informed about discounts, with 44 percent overall including it in their top four of contact methods. Email was the most preferred way, at 63 percent, but especially Millennials like mobile wallets, with 57 percent preferring them as the way to stay informed about offers and coupons.

Although these findings are nothing new in itself (see our article from 2013 on the combination of mobile payments and loyalty and various other research on this, it is another sign that just setting up a mobile payments offering, whether it is from a phone manufacturer, mobile operator or other party, is not likely to lead to a high adoption rate. It also shows that despite all the predictions since a number of years, mobile payments as a product (like so many other products) has to go through a ‘normal’ adoption cycle. As with so many new technologies it is the younger generations and those on higher incomes who take the lead and eventually the other generations and those on lower incomes will also start to use that product.

Mobile payment providers however should take note of the higher predicted usages when extra services are added, as these are likely to draw in the current non-users at a faster rate than without the extra services.



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