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Mobile Payments Growth Tapering: Report

The IDC Financial Insights 2014 Consumer Payments Survey polled consumers in regards to emerging payments methods.

After surging in recent years, mobile payments growth increased only slightly in 2013, according to the results of a survey conducted by IDC Financial Insights.

The 2014 Consumer Payments Survey polled U.S. consumers in regards to emerging payments methods and technologies, such as prepaid cards and mobile payments. The survey found that about one-third (37.2%) of respondents reported using a mobile payment method of some kind, which is a relatively modest gain compared to last year's survey, the firm said.

Of those who reported using mobile payments, PayPal Mobile remained the most frequently used mobile payment method, the poll found. PayPal was used by more than half of the respondents (58.6 percent) in the survey, ahead of both Amazon Payments and Apple's iTunes, which both remained at around 40 percent.

Further, online bill payment continues to rise in overall adoption, though usage has decreased slightly for a second year in a row, according to IDC Financial Insights. Seventy percent of those polled reported using electronic bill payment, either directly through a biller's site or through a consolidator like an online banking site. The new survey also saw a slight decline in both network-branded and store branded gift cards.

"After several years of growth, the market for 'alternative' payment methods is now entering a period where adoption gains may come more slowly and where simply providing an alternative isn't enough. Instead, providers need to offer products that add value beyond the payment," said James Wester, practice director for Worldwide Payment Strategies and the author of the report, in a statement.

[Related Content: Mobile Payments and Banks: Looking Forward]

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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Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
4/24/2014 | 1:30:33 AM
re: Mobile Payments Growth Tapering: Report
There are a lot of experts suggesting that something extra needs to be offered to entice customers to adopt mobile payments, such as coupon offers. But there are a lot providers already offering those kinds of extras. So I'm wondering what else could be that extra x-factor that creates more value to get the customer to pay with their phone rather than with their card.
Becca L
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Becca L,
User Rank: Author
4/27/2014 | 8:44:46 PM
re: Mobile Payments Growth Tapering: Report
I think every promotion and gimmick has been tried, but mobile payments still aren't taking off as hoped. Perhaps it's simply that the X factor hasn't been uncovered, but more and more it seems to me that it's still just too soon for the market. This could simply be a case where consumers aren't as ready as the technology.
mark.ranta
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mark.ranta,
User Rank: Apprentice
4/25/2014 | 2:17:56 PM
re: Mobile Payments Growth Tapering: Report
The enticement has to be extra but it also has to be large enough to get the consumer to switch their habitual nature.

Also, you still can't use your mobile phone at the POS at MOST storefronts, so while the ability to make purchases via an app on my iPad or make a mobile payment at Starbucks are well established, you still have to have a physical form of payment on you to make purchases at the vast majority of storefronts, until that changes the card will remain king.
Kelly22
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Kelly22,
User Rank: Author
4/25/2014 | 3:32:20 PM
re: Mobile Payments Growth Tapering: Report
True, there aren't many stores that will accept mobile payments at POS. If more of them offered the option, perhaps mobile payment growth would pick up speed.
Becca L
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Becca L,
User Rank: Author
4/27/2014 | 8:46:55 PM
re: Mobile Payments Growth Tapering: Report
This is huge for me. To put it into perspective, I still get annoyed when stores don't accept American Express, and although that's somewhat of a rarity, it can be enough to make me pull out other cards first so I don't have to deal with the moment of rejection.
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
4/27/2014 | 8:41:17 PM
re: Mobile Payments Growth Tapering: Report
Yes there needs to be an incentive for the merchant to accept it as well.
Nathan Golia
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Nathan Golia,
User Rank: Author
4/27/2014 | 11:55:31 AM
re: Mobile Payments Growth Tapering: Report
To me it seems like there's a bit of a plateau in the implementation of mobile payments. What brands, banks, and processors are able to agree on only seems to fit a certain kind of end user. Someone will have to take the next leap.
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