Most of us know the Federal Reserve
Board as the central banker for the United States. It is the entity that
conducts the nation's monetary policy, supervises and regulates banking
institutions, provides financial services to those institutions, and stabilizes
the financial system during times of crisis.
But fewer people know that the Fed has a vibrant research department
that provides cutting edge data on issues that affect consumer finance,
including how we pay for things.
The Fed recently released “Consumers’
Use of Mobile Financial Services 2013,” which updates
similar research done in 2011. Within the payments industry you won’t find
a hotter topic than mobile payments (unless it’s EMV, but that’s a story for
another day). But it can be difficult cutting through all the hype to get an
accurate picture of how consumers look at mobile: who uses it, who doesn’t,
what do they use it for, and how confident are they in mobile as a payment
system.
The Fed, with no dog in the hunt, has done this. “Consumers
Use of Mobile Financial Services 2013” is a thorough collection of data with
objective analysis. It covers 4 areas: mobile banking, mobile payments, shopping
with mobile technology and how secure consumers think it is to entrust
important personal information to a channel like mobile.
Among the report’s findings:
·
52% of mobile phone users own smartphones and
are significantly more likely to be users of mobile payments. The logical
conclusion is that as more and more people get smartphones
the adoption of mobile commerce will also grow.
·
Age has a lot to do with whether a consumer
adopts mobile banking. Fewer than 9% of respondents 60 or older copped to
having tried mobile mobile banking.
·
37% of those surveyed said that the main reason
they began banking by mobile phone was that they got a smartphone.
·
Consumers who engage in mobile banking are most
likely to check an account balance or recent transaction, or to transfer money
between two accounts.
Those who had adopted mobile payments appear pleased with
the channel. Over 90% of these respondents said they were “satisfied” or “very
satisfied” with their mobile payment experiences. In fact, a number appeared
ready to take the next step in the mobile payment march. About a third of them
said it was “likely” or “very likely” they would use contactless payments if
given the change. That’s up from 5% in the previous survey.
The report also digs into why consumers have rejected the
concept of mobile banking. The reasons seem to be more visceral than anything
else. Top reasons include having their banking needs met by more traditional
channels, and concerns over security.
Only a third of mobile banking users, when asked to rate the
overall security of mobile banking, labeled it “safe” or “very safe,” hardly a
ringing endorsement.
Despite the lingering concerns over security, more and more
consumers are using their mobile phones to check their bank balances or buy
their morning coffee. And while use of mobile payments has remained constant
over the last two surveys, according to the Fed, the use of mobile banking is
up 33% over the last year.
Clearly these gains are tied to the increasing proliferation
of smartphones. As mobile telephony grew over the last 15 years, proponents of
mobile commerce kept saying that it would take off once the industry found the “killer
app” that would drive the market. It appears now that the killer app wasn’t an
app at all. It was the phone itself.