Consumers Want Mobile Payments Everywhere, Survey Finds

Just as consumers have become accustomed to using their credit and debit cards across multiple shopping channels, so too are many expecting the digitized, and mobilized, versions of these cards to mimic that experience.

That finding, from 451 Research LLC’s “Mobile Pay and Commerce Advisory Report,” suggests that early adopters of mobile payments want more than the ability to pay with their smart phones only in stores. “This audience is expressing a clear demand for omnichannel capabilities in their mobile wallets,” says Jordan McKee, 451 Research senior analyst for mobile payments.

In an effort to assess how consumers view current mobile payments and wallets, 451 Research surveyed two groups of consumers. One, comprising more than 4,000 U.S. consumers, represented the U.S. population as a whole, McKee says. The other, with more than 4,100 respondents, was made up of early adopters.

The differences between two groups yielded some interesting results. One of the more surprising findings is how consumers plan to use mobile wallets within apps, McKee says. “Planned use of mobile wallets for purchases within native applications remains relatively low,” McKee says in an email, with only 26% of consumers as a whole and 18% of early adopters indicating they would use that payment option. “In these environments, card-on-file remains a dominant option for transactions and has made proliferation of alternatives difficult,” he says.

Other payment methods find more favor with each group. Forty-six percent of early adopters would use a mobile-payment app for online purchases, compared with 77% of consumers as a whole.

The percentages flip—at 76% and 45% for early adopters and all consumers, respectively—for using a mobile-payment app for an in-store purchase.

This illustrates that consumers want payment options that work across channels. “They expect it to seamlessly work across the virtual and physical worlds, much in the same way their credit card is able to today,” McKee says.

This expectation could prove troublesome to a company such as PayPal Holdings Inc., which says it has 184 million active accounts and has dominated online wallet use, McKee says. Four years ago, PayPal began an effort to add in-store PayPal acceptance at several retailers. The effort largely fizzled.

Apple Pay, in particular, is gaining ground among consumers with iOS devices, the survey found. When asked which app—PayPal or Apple Pay—they plan to use to make purchases in the next 90 days, 24% of early adopters chose PayPal and 67% said Apple Pay. Sixty-five percent of consumers as a whole chose PayPal and 50% of them chose Apple Pay.

Android users, who can select from PayPal, Android Pay, and Samsung Pay for mobile payments, overwhelmingly favor PayPal. Thirty-eight percent of early adopters would choose PayPal, compared with Android Pay’s 29%, and Samsung Pay’s 15%. The results for consumers overall were 72% for PayPal, 32% for Android Pay, and 9% for Samsung Pay.

The expectation of using the same mobile-payment method regardless of where the transaction takes place will alter the payments industry, McKee says. “This expectation will continue to increase the pressure on PayPal, which despite its incumbency online, has significantly lagged in expanding its offline presence. Banks with mobile-wallet aspirations will need to consider how to address the growing omnichannel needs of their customers.”