Payments pundits for years have been saying consumers need incentives to use mobile wallets, and a new survey report from Auriemma Consulting Group has numbers to back up the claim.
The survey of 1,505 consumers found that 25 percent of those who have an eligible smartphone use mobile pay services. Those consumers tend to be “employed, affluent and college educated,” the report said. Of those consumers, 32 percent said they have been offered a “mobile pay incentive” by late 2016—that compared with 19 percent who had been offered incentives earlier in the year. That matters, because when incentives are offered, 86 percent of consumers take them at checkout or via the mobile app in use, Auriemma said.
The survey also found that:
- Merchant-funded incentives are most common, with banks in second place.
- Almost 80 percent of consumers who have been offered incentives reported that those offers were linked to specific merchants.
- Most consumers do not seek out incentives but learn about them from friends, relatives or emails.
- Incentives encourage more use of mobile payments. Consumers offered incentives use mobile payments inside stores an average of 4.6 times over a one-week period compared with 3.1 times for those not offered incentives. In-app purchases also were higher with incentives—four times a week compared to 2.4 times without them.
“Incentives can give consumers the push they need to use mobile pay,” said Jaclyn Holmes, director of Auriemma Consulting Group’s Payment Insights. “Their greatest impact will be on consumers on the cusp of using the method, but who need an additional nudge.”
Recent evidence indicates that mobile wallets have largely failed to drive repeat usage. A report released in August 2016 by Javelin Strategy and Research found that mean mobile wallet usage has declined 20 percent over the past three years—to 3.0 purchases a month in 2015 from 3.7 in 2013. The reason for the drop is simple, according to Javelin: mobile wallet providers “are failing to show consumers clear reasons to reach for their phones instead of their credit or debit cards.”
That said, more institutions are joining the mobile wallet race. Wells Fargo did so last year, giving consumers using Android devices a new way to pay with their Wells Fargo debit and credit cards. Fifth Third enables its customers to use five major mobile wallet providers, with debit and credit card purchases via the recently added Android Pay and Microsoft Wallet, along with previous partners Apple Pay, Samsung Pay and Masterpass. And Chase recently launched the Chase Pay mobile app.
- Fifth Third Swings for the Mobile Wallet Fences
- Viewpoint: How to Boost the Appeal of Mobile Wallets
- Wells Fargo Joins the Mobile Wallet Race