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Mobile Payments & Digital Currencies Gain Popularity

A survey of 4,000 consumers conducted by Accenture found that millennials and high net worth individuals are the most likely to embrace digital payments.

More consumers -- specifically millennials and high-income individuals -- are using mobile payments as well as digital currencies, according to an Accenture survey of 4,000 consumers in the US and Canada. Some 40% of those polled reported having used their smartphones to make a payment at a merchant location, up from 16% in a similar Accenture survey from two years ago. Further, the study found that 8% of respondents used digital currencies to complete a payment transaction at least weekly, and 18% expect they will use digital currencies at least weekly by 2020.

Millennials and high-income consumers -- defined by the study as those with a household income of at least $150,000 -- are the most avid adopters of mobile payments, with 52% of millennials and 55% of high-income consumers having used their phones as a mobile payment device, the study found. Overall, 66% of respondents said they make cash transactions, 59% use debit cards, and 55% use credit cards at least weekly to make a payment, according to Accenture.

When asked how they anticipate using these payment instruments in 2020, the respondents indicated they would decrease usage of cash, debit cards, and credit cards as payment instruments at least weekly by 12 percentage points, 6 percentage points, and 3 percentage points, respectively. Of those consumers who have never used their mobile phone as a payment device in a merchant location, the two most cited reasons preventing them from doing so were security concerns and privacy concerns.

Regarding digital currencies, 8% of those polled said they use digital currencies to complete a payment transaction at least weekly, and 18% expect they will use digital currencies at least weekly by 2020. The primary reasons cited for embracing digital currencies is for protection of personal identity (46%) and lower transaction costs (43%).

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio

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Nathan Golia
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Nathan Golia,
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10/31/2014 | 3:20:01 PM
Re: a big jump
I agree. The only real reason to carry cash is for small purchases where the merchant looks at you sideways for not using cash (or straight up won't accept your payment). User-friendliness for certain digital payment platforms is still an issue (wrestling with Square readers is a regular source of delays at craft fairs) but wireless/contactless enablement could go a long way.
Becca L
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Becca L,
User Rank: Author
10/30/2014 | 5:24:39 PM
Re: a big jump
Most people don't really understand what's involved in "security," just tell them it's secure, trust us. Add a couple pictures of shields. If enough breaches stay out of the headlines and hype continues to build up around mobile payments I won't be surprised to see the entire consumer approach is changed by this time next year.
Becca L
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Becca L,
User Rank: Author
10/30/2014 | 5:22:47 PM
Re: a big jump
As part of the generation eager to adopt mobile payments, I cannot wait until my wallet is completely redundant. ID, payment, and hopefully digital keys - all in one. More room in my purse for all the other things I can't seem to leave the house without...
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
10/30/2014 | 3:43:34 PM
Re: a big jump
Apple is definitely banking on that crowd as they will be quick to get the new iPhone that is ApplePay enabled. So I suspect mobile payments will only become more popular for this demographic over the next few months as more iPhone 6's roll out.
Byurcan
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Byurcan,
User Rank: Author
10/30/2014 | 1:15:25 PM
Re: a big jump
Yes, that mental barrier of feeling "secure" paying with a phone is the last hurdle to probably widespread mobile payments adoption.
Kelly22
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Kelly22,
User Rank: Author
10/30/2014 | 11:39:32 AM
Re: a big jump
True, it does make sense that digital payments are highest among these two groups. I'm not surprised to see that security/privacy concerns are preventing people from paying with digital, either. As security measures improve, I'm sure we'll see more growth in the space. 
Byurcan
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Byurcan,
User Rank: Author
10/30/2014 | 8:42:28 AM
Re: a big jump
Yes, millennials are a group that's done everythign their whole adult like with a smartphone. And obviously the wealthier consumer tends to have the best/latest gadgets.
Greg MacSweeney
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Greg MacSweeney,
User Rank: Author
10/30/2014 | 7:57:41 AM
a big jump
It's not surprising that these demographics are the first to adopt mobile payments. After all, we have our phones in our hands almost all day, every day...so mobile payments is the next obvious step.
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