Editor’s Note: At Mobile World Congress 2015, MasterCard is participating in a discussion on the future of mobile to learn more about what’s next in digital commerce. We’re hosting a “What’s Next” in mobile series on our blog, inviting others to share perspectives.
The latest and greatest mobile technology has opened a world of opportunity for consumers around the globe—communication, information, media, shopping and, now, payments. The demand for mobile payment technology is driving a range of innovations across emerging markets and developed markets alike, with cross-country variation based on both differences in consumer demand as well as supply-side issues such as financial services regulation and infrastructure.
That’s not surprising. With the advent of technologies that allow mobile phones to transfer money, consumers who previously had no access to bank accounts, credit cards or other financial services are now empowered to participate in a rich matrix of digital storage and exchange of funds. Even consumers with ready access to financial services are taking advantage of a more convenient and secure format for transactions.
In the United States, a whopping 75% of consumers own a smartphone, up 15% since last year, according to Nielsen’s Total Audience Report. In addition, U.S. consumers absorb more than an hour and a half of media daily on their phones, an increase of 32%. With consumers so wedded to their phones, it only makes sense to leverage them in new ways.
As of late 2014, nearly 20% of American consumers used at least one mobile wallet app on a monthly basis, according to Nielsen’s Electronic Mobile Measurement. These apps have some stickiness, as over 70 percent of mobile wallet users continued to use at least one of these apps the following month. This is not insignificant; while mobile wallets have been around for a while, the official Apple Pay launch in October 2014 just brought renewed focus.
So, who is the mobile wallet user? Mobile wallet app users are fairly evenly balanced between males and females. They also skew young. That being said, 20% of mobile wallet users are over the age of 45, a contingent that includes the high-powered and increasingly tech savvy Baby Boomers. They are also nearly as likely to watch TV as the general market population—watching just 7% less than average, proving that brands can reach these tech savvy consumers through mainstream media.
Mobile payments are transforming the entire shopping experience, as mobile devices enable new ways for consumers to engage with brands, move through online and brick and mortar stores, and ultimately make purchases. But challenges still remain.
According to the Nielsen Mobile Payments Report, attracting the next wave of mobile wallet users will require addressing and educating consumers on security concerns. In addition, technology will need to continue to evolve—and be adopted. Over a quarter of consumers say their interest in using a mobile wallet is limited by their mobile device not having crucial payments technology, such as near field communications.
If the rapid adoption of smartphones has proven anything, it’s that consumers are clamoring for more powerful devices, and the power that enables, in their pockets. The landscape of global payments is shifting dramatically, and mobile is a key factor.