Mobile Payment Index Study

For informed direction

Mobile Payment Index

May 2012

Private & Confidential
© eDigitalResearch 2012

eDigitalResearch

New quarterly eDigitalResearch study looking at
the uptake and general consumer perceptions of
mobile payments and NFC

© eDigitalResearch 2012 2

eDigitalResearch
Mobile Payment Index: Introduction
The explosive uptake of smartphone devices and mCommerce by consumers has been hard to miss,
changing forever the way in which we browse, buy and communicate.

The introduction of NFC technology and contactless mobile payments are likely to change all of this
again and revolutionarise the way in which we perceive our mobile devices. The essential mental
check list of ‘keys, wallet, phone’ every time you leave the house will soon be a thing of the past.

eDigitalResearch have been tracking the development of mCommerce since October 2009 when the
channel was still in its infancy. Like the Internet, we’ve watched mobile become a customer touch
point in it’s entirety, driven completely by consumer demand.

2012 has been dubbed by many as the ‘Year of NFC’ when industry experts feel that everything will
align and contactless mobile payments will become a major part of our high street shopping
experience. With that in mind, eDigitalResearch have begun surveying consumer behaviour and
attitudes towards the technology, benchmarking results quarterly and tracking changing trends.

Unlike mCommerce, with mobile payments, it will be retailers, technology providers, handset
manufacturers and banks who will be driving the change. Without access to the technology,
consumers will be unable to use contactless mobile payments.

This study, the first of it’s kind, looks to understand current consumer thinking towards contactless
mobile payments and covers consumer demand to the barriers that currently stand in the way of
widespread adoption.


eDigitalResearch
Methodology
A survey was sent to a consumer panel between the 13th and 18th
March 2012. 2,078 responses were collected in total: 1,068 were
completed by smartphone owners and 1,017 were completed by non-
smartphone owners.
The survey covered all areas surrounding contactless mobile
payments, including:
Awareness
Previous use, early adopters and satisfaction
Future use
Perceived benefits and limitations
Improvements and Regulation
The survey also looked at consumer perceptions surrounding the use
of contactless mobile payment around the Olympic Games, as well as
mobile apps designed specifically to make mobile payments to
individuals.
eDigitalResearch will continue to run the Mobile Payment Index on a
quarterly basis, in order to help companies and organisations better
understand contactless mobile payment use, track developments, and
plan for the future. This is the first study of it’s kind.


Mobile Payment Index results

5

eDigitalResearch
Mobile Payment Index: Key Findings
General consumer awareness of contactless mobile payments is still relatively low. Retailers, handset
manufactures, network providers and banks will all need to work together to improve this.

Almost half (44%) of those that already have the technology enabled on their smartphone devices
have already used contactless mobile payments to make a purchase.

Results show that early adopters are predominately young males.

Satisfaction amongst early adopters is very high, suggesting that once used, consumers are likely to want
to use it again.

Mobile payments are likely to increase over the next year, especially amongst smartphone owners

Consumers are most likely to use contactless mobile payments at supermarkets, fast-food outlets, cafes,
and public transport links, places where queuing times can often exceed customer expectations.

Security is the one, fundamental concern surrounding contactless mobile payments. Providers will
need to work together to help increase consumer trust.


eDigitalResearch
Conclusions
Security remains a key concern for consumers, and unless more can be
done to reassure potential contactless mobile payment users, is likely to
dampen the growth of NFC technology in the UK.

Whilst the introduction of payment apps and other mobile enabled
payment devices is helping to build consumer awareness, the media glare
on security and other certain risks is helping to prevent widespread
consumer adoption.

In order for the UK to achieve the sort of NFC and contactless mobile
payment growth predicted in 2012, it is essential that payment providers,
retailers, banks and mobile manufacturers work together to put into place
the following three essential key features:
Consumer awareness: build the public’s knowledge and address
security concerns.
Retailer adoption: greater awareness will build as more and more
retailers encourage their customers to use the technology.
Access to technology: contactless mobile payments are currently
only available to a select few due to the limited number of NFC enabled
handsets available on the market.

eDigitalResearch
Contactless Mobile Payment: Awareness
Before this survey, were you aware of what Contactless
Mobile Payments were?

67% of survey respondents have heard of
Contactless Mobile Payments before, yet only 17%
of people are ‘completely aware’ of what it is.
36%
33%

17%
15%

Yes, completely Yes, partly No, but I have heard of it No, never heard of it

n=2,078

8

eDigitalResearch
Contactless Payment: Awareness

Have you seen any Contactless Mobile Payment Points
or symbols before?

15%
24%

Of the 2,000 consumers
surveyed, 61% haven’t seen
contactless mobile payment
points before, whilst just 15%
claim that they have. Of that 61%
15%, 29% live in London or
the South East.

n=2,016

9

eDigitalResearch
Contactless Mobile Payment: Awareness
Are you aware of any of the following types of goods or service
providers that have Contactless Mobile Payment points?

Supermarkets

Fast-food outlets

Public transport links

Cafes/cofee shops

Restaurants

Department stores
Awareness of contactless mobile
Smaller retailers payment points mirrors those brands
and retailers who are already investing
Hard good retailers
in the technology, such as
Entertainment venues supermarkets, fast food outlets
and coffee chains like Starbucks.
Soft good retailers

Other

0% 2% 4% 6% 8% 10% 12%
n=2016

10

eDigitalResearch
Mobile Wallets: Awareness
Before this survey, were you aware of what Mobile Wallets
and/or Mobile Wallet payments were?
54%

Awareness of mobile wallets is considerably lower than contactless
mobile payments. Just one third (33%) of those surveyed have never
heard of contactless mobile payments, whilst over half (54%) have no
previous knowledge of mobile wallets whatsoever.

20%
19%

7%

Yes, completely Yes, partly No, but I have heard of it No, never heard of it

n=2,016

11

eDigitalResearch
Mobile Wallets: Awareness

Do you know how to use a Mobile Wallet to pay for goods or
services?
74%
Consumer knowledge surrounding the use of mobile wallet technology is
particularly limited. Respondents seemed very unconfident on how to
actually use it to pay for goods and services and is something that all
parties (retailers, technology providers and banks) will need to work on
together to improve.

20%

6%

Yes, completely Yes, partly No

n=2,016

12

eDigitalResearch
Contactless Mobile Payments
Do you have a Mobile Wallet on your handset, or the ability to
make Contactless Mobile Payments via your phone?

64%
Of those respondents who own a
smartphone, just 4% have NFC
technology available on their handset.
One third (32%) of smartphone
owners are unsure, reflecting the
considerable amount of confusion
surrounding the technology and
reaffirms the need to increase 32%
awareness around contactless mobile
payments.

4%

Yes No Don't know
n=1,904

13

eDigitalResearch
Contactless Mobile Payment use
Have you used your phone to make a payment before, using
Contactless Mobile Payment Point?
47% 47%

Of the small percentage that do have
NFC enabled handsets, an
encouraging 47% have already used
the technology to make a purchase.

6%

Yes No Not sure

n=79

14

eDigitalResearch
Early Adopters

Results show that the majority of early adopters of contactless mobile technology are young males aged
between 25-34.

Male Female 18-24 25-34 35-44 45-54

8% 13%

32%
31%

68%
48%

n=79

15

eDigitalResearch
Contactless Mobile Payments: Previous use
Where have you used Contactless Mobile Payments?

Supermarkets

Resaurants

Department stores

Fast-food outlets

Soft goods retailers

Hard goods retailers
Over half (53%) of those that have already
Smaller retailers made a contactless mobile payment, have
done so at a supermarket. Interestingly,
Public transport links more consumers have used the technology
in more traditional retail settings than
Cafes / Coffee shops
fast food outlets and cafés, despite
Entertainment venues these brands having invested more in NFC
systems.
None of the above

0% 10% 20% 30% 40% 50% 60%
n=37
16

eDigitalResearch
Contactless Mobile Payment: Previous use
Of those survey respondents that have used Contactless
Mobile Payments to make a purchase, the majority have 6% 5%
6%
used the technology to purchase small to medium
Less than £5
items and on average spending £6.76 per purchase.
11% £5-£10
8%
£11-£20
£21-£50
59% 17%
£51-£80
54% 22%
£81-£100
£101-£200
25% More than £200
n=37

27%

14%

3%

Small purchases e.g. Medium purchases e.g. Big purchases e.g. High-end purchases Don’t know
sandwiches books, CDs, DVDs weekly food shop e.g. holidays
n=37

17

eDigitalResearch
Future use
How likely are you to use it again?
62%

62% of previous contactless mobile payment users
said that they were ‘Very likely’ to use the technology
again, whilst an additional 24% said they were ‘Quite
likely’, suggesting that satisfaction with the
technology is very high overall.

24%

11%

3%
0%

Very likely Quite likely Not sure Quite unlikely Very unlikely

n=37

18

eDigitalResearch
Contactless Mobile Payment: Satisfaction
How satisfied are you with using Contactless Mobile Payment
Points to make a payment?

Satisfaction amongst previous users of the 24%
technology is extremely high. 43% rate the
technology extremely highly, giving a score of 9 22%
or above.
19%
This suggests that users are likely to use the
16%
technology again, reaffirming the significance
of increasing consumer awareness and 14%
confidence surrounding contactless mobile
payments to encourage more first time
users.

3% 3%

0% 0% 0% 0%

0 1 2 3 4 5 6 7 8 9 10

n=37

19

eDigitalResearch Contactless Mobile Payment: Future use
18% of smartphone owners are either ‘Very likely’ or ‘Quite likely’ to use contactless mobile
payment within the next year, whilst an additional 34% are not sure - most likely due to the fact that
they currently do not have the technology available on their smartphone devices and are unsure of when
this functionality will be rolled out on more handsets. It’s important, however, that mobile firms,
technology providers and retailers work to increase consumer awareness and convert this segment
of consumers into contactless mobile payment users.

How likely are you to use contactless mobile payments in the
next one year?
38%
34%

12%
9%
6%

Very likely Quite likely Not sure Quite unlikely Very unlikely
n=1,979

20

eDigitalResearch
Future use
Of those that said that they would be either ‘Very likely’ or ‘Quite likely’ to use contactless mobile
payments within the next year, 29% are males aged between 25-34, whilst 32% are females within
the same age range.

Male Female
18-24 25-34 35-44 45-54 55-64 65+ 18-24 25-34 35-44 45-54 55-64 65+

7% 4% 5% 10%
10%

16% 29%
18% 32%
21%
23% 25%

24% of early adopters said that the maximum they would be willing spend using contactless mobile
payments was between £11-£20, whilst an additional 22.8% said that they would not be willing to
spend above £50.

21

eDigitalResearch
Future use
Where would you use Contactless Mobile Payments?

Supermarkets

Resaurants

Fast-food outlets
Future users would be most
Public transport links likely to use the technology
at supermarkets, fast
Cafes / Coffee shops food outlets, café’s and
public transport links,
Entertainment venues
where waiting can
Department stores traditionally take up a
considerable amount of
Smaller retailers time, and where consumers
feel that they would see
Soft goods retailers the greatest benefit.
Hard goods retailers

None of the above

0% 10% 20% 30% 40% 50% 60% 70% 80%
n=368

22

eDigitalResearch
Future use
Why are you unlikely to use Contactless Mobile Payments in the near
future?
58%

35%
28% 29%
22% 21% 23%

14% 15%
13%

Happy with Concerns Have no I'm not Unsure how Limited places The I Unsure of Don't want Not likely to
how I pay at about reason to use interested in it the I can use it have/want which phones that get a new
the moment security/fraud it technology doesn't allow allow technology phone that
works contactlss contactless enabled on allows
mobile mobile my phone contactless
payments payment mobile
payment

A lack of information and understanding, as well as concerns over security are major factors
stopping consumers from using the technology in the foreseeable future. Other barriers include a
lack of knowledge when it comes to NFC enabled handsets.

n=1,616

23

eDigitalResearch
Perceived Benefits
Ease and convenience are seen as the main consumer benefits of contactless mobile payments.
Worryingly, almost one third (32%) don’t see any benefits whatsoever. However, 56% of these are
non smartphone owners and are therefore unlikely to have access to the technology in the near
future.

32%
What do you think are the benefits of using Contactless Mobile 32%
Payments to make a purchase?
29% 29%

22%

17%
15% 15%

9%
6% 6%
4%
3%

Convenient Easier to Quick to No paper Better able It's safe Less likely It uses the It is There are The Other I don't
to pay with pay with pay with receipts so to keep and secure to latest moving lots of technology think there
mobile mobile mobile less track of encounter technology forward paypoints is are any
than taking change of how much fraud with the around available, benefits
cash/cards losing I am times so why not
with me personal spending
info n=2,016

24

eDigitalResearch
Perceived Limitations
Security and fraud are currently the biggest barriers to widespread adoption, as well as concerns over
technical issues. However, as retailers, providers and manufacturers work together to improve
consumer knowledge and access, we would expect the amount of people concerned about how the
technology works, access to pay points and NFC enabled handsets to decrease over the course of the
coming months.

What do you see as the limitations of using Contactless Mobile
Payments to make purchases?
51%

38%
34%
31%
29% 28%
23% 23%
22%

13%
7% 7%
4%

Can only be Not needed, There is a More Hard to keep Concerns over More open to Too Not much clarity Not enough pay Technology not Other There are no
used for certain can pay using maximum susceptible to track of how security fraud technologically on how much to points around available on all limitations
purchases cash/cards spend limit technical issues much I am advanced pay/how it phones
spending n=2,016 works

25

eDigitalResearch
Contactless Mobile Payments: Regulation
Who do you think should be responsible for regulating mobile
payment technology?
40%
38%
35%
34%

21% 21%
19% 19%
16%
15%
10%
7%

0% 1%

Of the 2,000 consumers surveyed, 40% of consumers feel that regulation responsibilities should fall to
mobile phone networks, whilst 35% feel that banks should take up the mantel. Only 15% feel that
the responsibility should lie with handset manufacturers and suggests that if banks and mobile
networks work together to increase consumer trust, they are likely to make the biggest strides.
n=2,016

26

eDigitalResearch
Contactless Mobile Payments: Improvements
We asked all 2,000 survey respondents what improvements they think need to be made to Contactless
Mobile Payments.

Better/Tighter security: 22.8% of respondents do not feel confident enough that
there is enough security surrounding Contactless Mobile Payments

More information: 10.34% of consumers feel that more information is needed to
help increase awareness. Similarly, an additional 6.9% felt that they didn’t have enough
information on Contactless Mobile Payments to make a comment within the survey,
reaffirming the importance of increasing awareness.

More pay points: 8.75% of respondents felt that the lack of available places where
they could use Contactless Mobile Payments was holding back the technology. To
improve, retailers and technology providers need to look at integrating more pay
points around stores, as well as branching out to all locations.

Technology available across all mobile devices: 1.3% of respondents wanted to
start using the technology yet couldn’t because NFC technology is only available to a select
number of mobile users. We would expect this figure to drop though as more and more popular
makes and models include the technology.

27

eDigitalResearch
Mobile Payment Apps
After the introduction of Barclay’s Pingit app, we decided to ask consumers what their views and opinions
were on this type of technology and how possible widespread adoption is likely to be.

How likely would you be to use an app like Pingit to make payments if your bank introduced
the same technology?
34% 38%

12%
9%
6%

n=1,632 Very likely Quite likely Not sure Quite unlikely Very unlikely

75% Why have you not used the Barclays Pingit app?

41%

23% 20%
16% 13% 16%
12% 11%
1%

Never heard Not a Phone not Happy with Concerns Had no I'm not Unsure of Don't know Other
of it Barclays compatible how I pay at about reason to use interested in how the anyone else I
customer the moment security/fraud it it technology can use it
n=1,969 works with

28

eDigitalResearch
Mobile Payment Apps

Are you more or less likely to trust this method of payment if it is being endorsed by
banks?
55%

31%

15%

n=2,016 More likely to trust it Less likely to trust it Doesn't make a difference

Again, general consumer awareness surrounding this type of technology is very low, with 75% of those
surveyed claiming that they had never heard of the app. However, there appears to be a lot more trust
of this type of technology when compared to contactless mobile payments, with just 13% of the 2,000
surveyed claiming that they had concerns over security and fraud.

Almost 1 in 5 (18%) said that they were likely to use the technology if their banks introduced a similar
app, whilst an additional 34% are not sure, suggesting that if more information is provided to
consumers, then uptake may be higher.

29

About eDigitalResearch

30

eDigitalResearch
eDigitalResearch mobile insight solutions

In store QR
App mCommerce codes

Mobile detection technology
Automatically detects when a user is accessing a survey through a PC or mobile
device (smartphone and tablet) and serves them either a standard or mobile
enabled survey

Currently tracking around 10% (+100% yoy) survey completes from a mobile or
tablet device for all eDigitalResearch surveys

‘Younger fashion’ most popular sector for completing surveys on mobile

31

eDigitalResearch
Mobile Marketing Research Association

eDigitalResearch are very proud to be a Founding
Member of the MMRA

eDigitalResearch, along with other members, will be working alongside
the MMRA to develop and promote professional standards and ethics in
mobile market research.

eDigitalResearch’s mobile studies include:
• Tracking rise of mCommerce with consumers
since October 2009
• Benchmarking emerging mobile retail sites
since August 2010
• Benchmarking mobile retail Apps since April
2010
• Comparing cross channel consumer experience
across eChannel’s since December 2011

32

eDigitalResearch
Who we are and what we do
We are one of the leading providers of digital market research
• established in 1999 by current directors/owners
• self funded, financially secure, clear ethics
• own system with outstanding technical support
• team of research professionals

We are migrating traditional market research to digital methodologies
• reducing costs – fixed pricing model
• faster results – real time results
• improving accuracy – no response or panel limits

We are developing and introducing innovative research solutions
• social networking (digital communities)
• maximising respondent engagement
• industry norms/benchmarking
• mCommerce/mResearch

Company Partners


eDigitalResearch
Product Overview

eMysteryShopper eDigitalSurvey
• ‘Open’ user research
• ‘Closed group’ research
• Visitor/user opinion
• Usability &
• Key performance
‘end to end’ experience
indicators
• Benchmarking
• Brand advocacy

Verbatim Coding
• Automated qual-to-
HUB ePanelManager
Insight and
quant text analysis Analysis • Omnibus research
•Full reporting of • Client panel
verbatim comments management
across any digital • Media panels
medium
eDigitalCommunity
• Web 2.0
• 3 way dialogue from
profiled users
• Product ratings
• Net chats


Page 34

For a bespoke research
programme designed specifically to
gain insight and understanding
into your mobile audiences, please
Vanbrugh House, Grange Drive
contact Lynda Baker, Business
Hedge End
Development Manager at
Hampshire SO30 2AF
lynda.baker@edigitalresearch.com
Tel: 01489 772920 Similarly, if you would like more
www.edigitalresearch.com information on the results then
please contact eDigitalResearch by
@eDRtweet emailing info@edigitalresearch.com
eDigitalResearch
Key Contacts:
Lisa Bonczyk – Associate Director, Sales and Marketing–lisa.bonczyk@edigitalresearch.com
Liana Vickery – Marketing Executive - liana.vickery@edigitalresearch.com


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