Payment Metrics                     Payment Metrics:       Consumer Attitudes towards and Usage of Traditional           a...
Payment Metrics                                  Prospectus contents                                                      ...
Payment Metrics                    What is the scope of the research?       This report titled Payment Metrics: Consumer A...
Payment MetricsWhich organisations are covered by this research?           Companies reported on by consumers in this stud...
Payment Metrics                            What methodology has been used?      The research for this study was carried ou...
Payment Metrics                       What is the report structure? (1)     0. Executive Summary: providing a concise eval...
Payment Metrics                       What is the report structure? (2)     4. Loyalty Schemes: investigating membership a...
Payment Metrics                    What is the report structure? (3)     7. Online Payments: a summary of frequency of usa...
Payment Metrics         What are the key features of the research?     Key features of this report include:     • coverage...
Payment Metrics                    How can the research be used?     You may be able to use this report in one or more of ...
Payment Metrics                            Who can use the research?     1.    Banks, other card issuers and card brands: ...
Payment Metrics                      What are some of the key findings?                      1. For one-off purchases, pay...
Payment Metrics          What are some of the key findings? (cont.)               2. By card function, rechargeable prepai...
Payment Metrics          What are some of the key findings? (cont.)                            3. Respondents with Apple a...
Payment Metrics          What are some of the key findings? (cont.)     4. Key findings from the executive summary include...
Payment Metrics                            What is the cost and format? (1)  Payment Metrics: Consumer Attitudes towards a...
Payment Metrics                    How can the research be purchased?     Simple. Just go to the relevant area of the Fina...
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Report prospectus payment_metrics_consumer_attitudes_utilisation_traditional_emerging_means_payment_uk

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Payment Metrics: Consumer Attitudes towards and Usage of Traditional and Emerging Means of Payment in the UK is a study about the way in which consumers currently pay for different products and services and how this is likely to change in future. It covers both established payment means, including different types of payment card, and payment methods that seem set for rapid growth in future, most notably mobile and contactless payments. In addition, consumer behaviour is analysed in the fields of specialised online payments and domestic / international remittances, and the research also addresses two areas that are central to consumers’ choice of payment means: loyalty programs; and insurance and assistance policies linked to added value accounts and payment cards.

The report examines how consumers state that they are most likely to pay for small, medium-sized and large irregular purchases at present and also how they report paying for common services that require recurring payments (e.g. cable / satellite TV, electricity, gas or water bills, flat or house rental, travel season tickets etc.). In both cases, it quantifies usage of the following payment means: cash; cheques or postal orders; debit cards; credit or charge cards; rechargeable prepaid cards; and any other means (e.g. mobile or online payments not involving debit, credit or charge cards). Also, for regular payments, it takes into consideration direct debits, standing orders and bank transfers, and distinguishes between rechargeable prepaid cards with multiple usage functions and those usable for one particular service only.

You may be able to use this report in one or more of the following ways:

- gain access to a complete ‘tool kit’ for organisations with an interest in payments to understand the current behaviour of UK consumers in this huge and diverse sector;

- know exactly which types of card are held most widely by consumers and which they report using most often - for example, how does frequency of usage of the many different types of affinity and co-branded card compare to that of regular cards and what differences in utilisation are visible when cards are analysed by function, brand, status and target?

- appreciate the extent to which UK consumers are ready to embrace future opportunities to make payments using their mobile phone (and, possibly, other devices such as wristwatches);

- understand the typical member profile of the UK’s main loyalty programs and the extent to which each has engaged its members to actually make use of it;

- evaluate which forms of insurance and assistance are most likely to enhance the appeal of payment products and which are most likely to be used by consumers in the form of claims or calls for assistance.

For further information about this research, please access the table of contents and report prospectus by clicking on the links at the top of this page or e-mail info@finaccord.com.

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Report prospectus payment_metrics_consumer_attitudes_utilisation_traditional_emerging_means_payment_uk

  1. 1. Payment Metrics Payment Metrics: Consumer Attitudes towards and Usage of Traditional and Emerging Means of Payment in the UK Report Prospectus March 2012© Finaccord, 2012 Web: www.finaccord.com. E-mail: info@finaccord.com 1
  2. 2. Payment Metrics Prospectus contents Page What is the scope of the research? 3 Which organisations are covered by this research? 4 What methodology has been used? 5 What is the report structure? 6-8 What are the key features of the research? 9 How can the research be used? 10 Who can use the research? 11 What are some of the key findings? 12-15 What is the cost and format? 16 How can the research be purchased? 17© Finaccord, 2012 Web: www.finaccord.com. E-mail: info@finaccord.com 2
  3. 3. Payment Metrics What is the scope of the research? This report titled Payment Metrics: Consumer Attitudes towards and Usage of Traditional and Emerging Means of Payment in the UK is a brand new study about the way in which consumers currently pay for different products and services and how this is likely to change in future. It covers both established payment means, including different types of payment card, and payment methods that seem set for rapid growth in future, most notably mobile and contactless payments. In addition, consumer behaviour is analysed in the fields of specialised online payments and domestic / international remittances, and the research also addresses two areas that are central to consumers’ choice of payment means: loyalty programs; and insurance and assistance policies linked to added value accounts and payment cards. The report examines how consumers state that they are most likely to pay for small, medium-sized and large irregular purchases at present and also how they report paying for common services that require recurring payments (e.g. cable / satellite TV, electricity, gas or water bills, flat or house rental, travel season tickets etc.). In both cases, it quantifies usage of the following payment means: cash; cheques or postal orders; debit cards; credit or charge cards; rechargeable prepaid cards; and any other means (e.g. mobile or online payments not involving debit, credit or charge cards). Also, for regular payments, it takes into consideration direct debits, standing orders and bank transfers, and distinguishes between rechargeable prepaid cards with multiple usage functions and those usable for one particular service only.© Finaccord, 2012 Web: www.finaccord.com. E-mail: info@finaccord.com 3
  4. 4. Payment MetricsWhich organisations are covered by this research? Companies reported on by consumers in this study Amazon LG Sainsburys American Express Lloyds TSB Samsung Apple MasterCard Skrill ASDA Moneygram Sony Ericsson Included where relevant in the Barclays Motorola Tesco chapters about payment cards, mobile Blackberry NatWest T-Mobile payments, online payments and Diners Club Nokia Virgin domestic / international remittances. Google O2 Visa HSBC Orange Vodafone HTC PayPal Western Union Loyalty programs reported on by consumers in this study Amazon IKEA FAMILY American Express Membership Rewards John Lewis / Waitrose Partnership Avios (formerly Airmiles) Marriott Rewards Barclaycard Freedom Maximiles Best Western Rewards M&S Rewards or M&S Premium Club Included in the chapter about loyalty bmi Diamond Club Nectar programs. Boots Advantage Priority Club British Airways Executive Club Tesco Clubcard GAME Reward The Co-operative Membership Hilton HHonors Virgin Flying Club© Finaccord, 2012 Web: www.finaccord.com. E-mail: info@finaccord.com 4
  5. 5. Payment Metrics What methodology has been used? The research for this study was carried out during February 2012 using an online consumer panel. In total, completed surveys were filled in and submitted online by over 1,000 consumers breaking down by age group, annual household income band and geographical location as illustrated in the charts below. Northern London / Wales, 2.8% Ireland, 1.1% Greater 65 or over, North-East, 19.9% 16-24, 21.5% London, 15.3% 5.2% East Anglia, 6.9% East Midlands, 7.1% South-East (exc. London), 55-64, 12.2% 14.8% £60,000 - Over £80,000, West Midlands, 25-34, 15.7% £79,999, 4.2% 3.1% Less than 7.8% £50,000 - £10,000, 14.9% £59,999, 4.1% £40,000 - Scotland, 8.0% North-West, 45-54, 13.4% £49,999, 7.9% 12.1% 35-44, 17.3% South-West, £10,000 - 8.9% Yorkshire / £14,999, 16.1% Humberside, 10.3% £30,000 - £39,999, 13.5% £15,000 - £25,000 - £19,999, 12.3% £29,999, 11.5% £20,000 - £24,999, 12.7%© Finaccord, 2012 Web: www.finaccord.com. E-mail: info@finaccord.com 5
  6. 6. Payment Metrics What is the report structure? (1) 0. Executive Summary: providing a concise evaluation of the principal findings of the report. 1. Introduction: offering rationale and a detailed description of methodology. 2. Payment Types: beginning with an analysis of the main payment methods currently used by consumers for irregular purchases, differentiating between low-value (less than £15), medium- value (£15-£50) and high-value (more than £50) purchases, followed by a consideration of payment means used for 14 common types of recurring purchase (e.g. Council Tax, electricity / gas, mobile telephone). Payment methods benchmarked include cash, cheques / postal orders, credit / charge cards, debit cards, direct debits / standing orders, and rechargeable prepaid cards. 3. Payment Cards: offering a definitive overview of consumer holdings and utilisation rates of payment cards with separate consideration afforded to card function (i.e. debit, charge, credit, store and rechargeable prepaid cards), card brand / network (i.e. American Express, Diners Club, MasterCard, Visa and private label cards), card status (i.e. standard, gold, platinum and ultra high status cards), card target (i.e. consumer and business cards), and card type (e.g. airline, charity, football club, hotel chain, loyalty scheme, retailer, supermarket and telecoms cards). Report structure continued overleaf...© Finaccord, 2012 Web: www.finaccord.com. E-mail: info@finaccord.com 6
  7. 7. Payment Metrics What is the report structure? (2) 4. Loyalty Schemes: investigating membership and engagement rates both by generic type of loyalty program and across 20 of the largest specific loyalty programs in the UK (as listed on slide 4), this section concludes with an analysis of the program structures preferred by consumers as determined by earning systems (i.e. cashback, discounts, points / miles, vouchers) and earning / redemption opportunities (i.e. with single organisations or across multiple, different organisations). 5. Insurance and Assistance: providing data for penetration rates across added value accounts and payment cards plus analyses of perceived value to consumers and claims utilisation / frequency for 16 types of insurance and assistance (e.g. breakdown recovery insurance, card protection insurance, concierge services, home emergency insurance, identity protection assistance, mobile gadget insurance, travel insurance etc.) that can be linked to payment products. 6. Mobile / Contactless Payments: delivering unique insight concerning consumer awareness of, receptiveness towards and general expectations concerning mobile and contactless payments with results broken down by both gender and age group, in order to highlight important socio-economic differences, and by make of mobile phone used (e.g. Apple, Blackberry, HTC, LG, Nokia, Samsung) with a view to demonstrating how this variable will also affect consumer behaviour. Report structure continued overleaf...© Finaccord, 2012 Web: www.finaccord.com. E-mail: info@finaccord.com 7
  8. 8. Payment Metrics What is the report structure? (3) 7. Online Payments: a summary of frequency of usage by consumers of different online payment means such as Amazon Payments, Google Checkout, PayPal, Skrill (formerly Moneybookers) and direct entry of payment card details - how do these options stack up against each other? 8. Domestic / International Remittances: a final chapter benchmarking consumer behaviour in the fields of domestic and international remittances with implied market shares calculated for the competing remittance options, namely: Moneygram; PayPal; Skrill (formerly Moneybookers); Western Union; other companies (excluding banks) offering a remittance service; direct debits, standing orders and other bank transfers (e.g. BACS); cash, cheques or postal orders sent in the post; prepaid or gift cards sent in the post; and person-to-person payments sent by mobile phone.© Finaccord, 2012 Web: www.finaccord.com. E-mail: info@finaccord.com 8
  9. 9. Payment Metrics What are the key features of the research? Key features of this report include: • coverage of consumer attitudes towards and utilisation of a very broad range of payment means including long-established options (e.g. cash, direct debits / standing orders, payment cards) as well as more recent or emerging alternatives (e.g. domestic / international remittances, mobile payments, specialised online payment means); • detailed analysis of consumer holdings and utilisation of the numerous different types of payment card available in the UK including debit, charge, credit, store and rechargeable prepaid cards; • cutting-edge investigation into consumer awareness of and interest in using mobile and contactless payments including a ranking of organisations that they are looking to for mobile payment solutions; • unique consideration of consumer behaviour in the context of 20 specific loyalty programs including Avios, American Express Membership Rewards, Boots Advantage, Maximiles, Nectar, Priority Club and Tesco Clubcard; • insights into the main types of insurance and assistance that can be added to payment products to encourage consumers to acquire and use them.© Finaccord, 2012 Web: www.finaccord.com. E-mail: info@finaccord.com 9
  10. 10. Payment Metrics How can the research be used? You may be able to use this report in one or more of the following ways: • gain access to a complete ‘tool kit’ for organisations with an interest in payments to understand the current behaviour of UK consumers in this huge and diverse sector; • know exactly which types of card are held most widely by consumers and which they report using most often - for example, how does frequency of usage of the many different types of affinity and co- branded card compare to that of regular cards and what differences in utilisation are visible when cards are analysed by function, brand, status and target? • appreciate the extent to which UK consumers are ready to embrace future opportunities to make payments using their mobile phone (and, possibly, other devices such as wristwatches); • understand the typical member profile of the UK’s main loyalty programs and the extent to which each has engaged its members to actually make use of it; • evaluate which forms of insurance and assistance are most likely to enhance the appeal of payment products and which are most likely to be used by consumers in the form of claims or calls for assistance.© Finaccord, 2012 Web: www.finaccord.com. E-mail: info@finaccord.com 10
  11. 11. Payment Metrics Who can use the research? 1. Banks, other card issuers and card brands: this research offers valuable insights not only about dynamics in the payment card market but also about alternative methods of payment that increasingly threaten to replace cards; 2. Mobile telecoms operators: around the world, mobile telecoms firms are working to realise a future in which mobile phones become a primary means of making payments - this study sheds light on an array of issues related to this evolution in the UK; 3. Other payment companies: organisations active in specialised payment segments such as online payments and domestic / international remittances will benefit from the wide-ranging data in this report; 4. Manufacturers of payments-related hardware and software: opportunities exist for a wide range of payment technology companies to occupy influential positions in the payments value chain; 5. Insurance, warranty and assistance companies: combining insurance and assistance with traditional payment products is an established practice but what could the opportunities be in this field in relation to emerging payment means? 6. Companies that receive payments from consumers: organisations such as electricity / gas firms, media companies, supermarkets and travel entities could all benefit from the unique perspectives in this study which will help them to understand how their customers want to pay them in the future.© Finaccord, 2012 Web: www.finaccord.com. E-mail: info@finaccord.com 11
  12. 12. Payment Metrics What are some of the key findings? 1. For one-off purchases, payment habits among consumers aged from 16 to 24 are very different from those of individuals in older age groups Payment means used most frequently for irregular purchases - unweighted average across all transaction sizes 60% 48% Debit card 36% Credit / charge card 24% Cash 12% All other means 0% 16-24 25-34 35-44 45-54 55-64 65+ Source: Finaccord Payment Metrics survey© Finaccord, 2012 Web: www.finaccord.com. E-mail: info@finaccord.com 12
  13. 13. Payment Metrics What are some of the key findings? (cont.) 2. By card function, rechargeable prepaid cards experience a lower frequency of use, where held, than debit cards and credit, charge and store cards Card utilisation frequency by card function 100% Card never used Card used rarely 80% Card used sometimes 60% 40% Card used most frequently but not main one 20% Main card used most frequently 0% All debit All credit, charge All rechargeable cards and store cards prepaid cards Source: Finaccord Payment Metrics survey© Finaccord, 2012 Web: www.finaccord.com. E-mail: info@finaccord.com 13
  14. 14. Payment Metrics What are some of the key findings? (cont.) 3. Respondents with Apple and HTC mobile phones display the most enthusiasm towards the concept of mobile payments Apple Blackberry Yes, very favourable HTC Yes, quite favourable LG Neither favourable nor unfavourable Motorola Nokia No, not very favourable Samsung No, not at all favourable Sony Ericsson Other Don’t know Average 0% 20% 40% 60% 80% 100% Receptiveness among respondents with a mobile phone towards the concept of using mobile phones to make payments Source: Finaccord Payment Metrics survey© Finaccord, 2012 Web: www.finaccord.com. E-mail: info@finaccord.com 14
  15. 15. Payment Metrics What are some of the key findings? (cont.) 4. Key findings from the executive summary include: • 74.3% of respondents with a mobile phone state that they are aware of the fact that opportunities to utilise mobile phones to make payments (e.g. via contactless merchant payments and mobile transfers / wallets) are likely to increase in future; • however, at a combined 39.5%, those that are either not very favourable or not at all favourable towards this concept outweigh those that describe themselves as quite favourable or very favourable, at 31.1% (with the balance of 29.4% not expressing an opinion either way); • while not necessarily the most widely-held types of payment card, Finaccord’s analysis of card utilisation indicates that, where held by consumers, charity credit cards, ultra high status credit cards, supermarket credit cards, football club credit cards and retailer credit or charge cards (other than those of supermarkets) are the card types that experience the highest rates of usage; • PayPal has established itself as a dominant provider in the markets for both specialised online payments and domestic and international remittances, where individuals are paying other individuals without actually being able to meet them.© Finaccord, 2012 Web: www.finaccord.com. E-mail: info@finaccord.com 15
  16. 16. Payment Metrics What is the cost and format? (1) Payment Metrics: Consumer Attitudes towards and Usage of Traditional and Emerging Means of Payment in the UK is available as a standard Adobe Acrobat PDF document. The prices for this title in its entirety, individual chapters within it and other UK consumer research titles available at the time of publication are as shown in the table below. PAYMENT METRICS REPORT / CHAPTER PRICE * OTHER REPORTS PRICE * Payment Metrics - total report GBP 1,995 Aggregation Metrics GBP 1,795 within which Assistance Metrics GBP 995 Payment Types - individual chapter GBP 295 Channel Metrics - overview report GBP 2,995 Payment Cards - individual chapter GBP 595 Channel Metrics - individual briefing GBP 395 Loyalty Programs – individual chapter GBP 295 Mobile Metrics GBP 595 Insurance and Assistance - individual chapter GBP 295 Partner Metrics GBP 1,995 Mobile / Contactless Payments - individual chapter GBP 595 Risk Metrics GBP 1,995 Online Payments - individual chapter GBP 145 Travel Metrics GBP 595 Domestic / International Remittances - individual chapter GBP 295 Warranty Metrics GBP 995 For UK-based clients, VAT at the prevailing rate will be added to the basic price. Costs quoted are for a single site user licence only. For a corporate user licence, please see the next slide for further details. Invoices can be paid in EUR, at the prevailing exchange rate, if preferred.© Finaccord, 2012 Web: www.finaccord.com. E-mail: info@finaccord.com 16
  17. 17. Payment Metrics How can the research be purchased? Simple. Just go to the relevant area of the Finaccord web site available at www.finaccord.com/order_uk_payment_metrics.htm and fill in the online order form, clearly indicating: • report required • type of corporate user licence, if required * • billing name • address and e-mail address • purchase order number, if applicable Please allow up to one working day for the delivery of electronic copy by e-mail. * For the corporate user licence please choose one of the following options: 1. One office, one country: no supplement over and above basic cost of reports ordered 2. Multiple offices, one country: additional 20% over and above basic cost of reports ordered 3. Multiple offices, two to ten countries: additional 50% over and above basic cost of reports ordered 4. Global (unlimited offices in unlimited countries): additional 100% over and above basic cost of reports ordered VAT at the prevailing rate will be added to the price of any corporate user licence acquired by UK-based buyers.© Finaccord, 2012 Web: www.finaccord.com. E-mail: info@finaccord.com 17

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