Millions Sign Up for Mobile Payments—But How Many Stick Around Long Term?

Observers of mobile wallets have focused attention on user counts as a sign of adoption, but that leaves open the question of how many of these consumers are turning into habitual users.

As it turns out, mobile-payments apps have a much harder time retaining users than do banking apps, according to research released Wednesday. Globally, just 16% of users on average return to a payment app the day after install, and 30 days later that number has dipped to just under 6%, according to the report prepared jointly by Adjust GmbH, a marketing and analytics firm with offices worldwide, and App Annie, a San Francisco-based provider of app data.

The data vary little between users obtained via paid advertising and those who discover the app on their own or via word-of-mouth, a category of users the report refers to as “organic.” Still, the organic category generally maintains a 3-percentage-point edge over the paid category throughout the first 30 days after install, so that by the 30th day 6% of organic users are still visiting the app while just 3% of “paid” users are, according to the data.

The two firms gathered data from 36 countries throughout the first half of this year and identified apps through the “finance” category in both iOS and Google Play. Banking apps included products from providers that have no physical branches or that offer only a single service.

Mobile wallets like Apple Pay, Google Pay, and China’s WeChat Pay have attracted millions of consumers, but the report casts light on how many of these users are relying on the apps for everyday functions over the long term.  “Winning users is an uphill battle—even if marketers invest in paid campaigns to do it,” the report concludes. “Indeed, paid performance is low throughout the retention curve, as paid-for users are noticeably disloyal.”

As the report points out, all mobile apps suffer erosion in usage over time, but some do better than others. For example, nearly two-thirds of users return to their mobile-banking apps on the day after install, and by the 30th day a relatively robust 15% are still using the app. By contrast, the corresponding averages for all finance apps are 29% and 9%, the report says.

Indeed, mobile banking even does relatively well when up against non-financial apps. The day-30 retention rate for apps in the “News” category is 18% and that for “Music” is 17%.

“Clearly, [p]ayment apps have a hill to climb when it comes to improving retention—and the hardest part may be the effort required to change current consumer attitudes,” the report notes. “To complicate matters, such apps are not just competing with market rivals; they are working to switch dependence (even preference) on cards and cash.”

A few features specific to users could boost mobile-wallet retention, the report suggests. Examples include notices regarding account balances and offers tailored to user preferences. “It’s here that personalized messaging and marketing to address specific customer segments and needs could make a difference,” the report says. Factors like assurances about security could also help, as recent surveys indicate ongoing consumer anxiety about financial loss in mobile apps.