IDC Financial Insights announced the results of the eighth annual Consumer Payments Survey, focused on the usage of emerging payment technologies.
The new report, ‘Business Strategy: Results from the 2012 Consumer Payments Survey’ found that mobile payments have more than doubled in popularity, reaching over 33% of survey respondents. Of those that had made a mobile payment, more than half used PayPal Mobile (56%), with Amazon Payments and Apple’s iTunes service statistically tied at about 40%. In addition, prepaid cards showed strong growth, particularly in the network branded and benefit submarkets.
Additional key findings include:
IDC Financial Insights emphasizes the strong results in prepaid cards and mobile payments should lend urgency to financial institutions’ efforts to develop products in these areas. Demand is clearly there, and banks need to make sure they are not left behind by non-banks that are more narrowly focused on the opportunity.
In addition, reward programs are one of the strongest areas for banks to build upon, because banks already sit between most commercial transactions, and thus have the best data of any competitor. Banks also have a long history of offering rewards on their cards, and of working with retailers on cross-promotions. With the limits on debit card interchange creating a revenue gap, targeted offers offer a replacement revenue source, and can also anchor ventures in the prepaid and mobile payments markets.
In May 2012, IDC Financial Insights conducted a nationally representative survey of US consumers focused on usage of emerging payment technologies. While the 2011 survey noted that the severe recession and financial crisis depressed adoption of several payment technologies by both financial institutions and consumers, the results this year were more in line with historic trends, and mobile payments in particular have become vastly more common. As a result, this year, IDC Financial Insights was able to expand the number of mobile payment questions to garner additional insight into how consumers are using them.
‘Based on our results, we expect to see continued growth in open-loop prepaid cards and mobile payments next year, and believe that the improvements being offered in electronic bill delivery will break electronic bill presentment and payment (EBPP) out of its doldrums as well,’ explains Aaron McPherson, practice director, IDC Financial Insights. ‘The advent of new card-linked offer programs should increase the influence of rewards on the average consumer, however, this will depend on how many banks choose to move ahead aggressively with these programs, and how many merchants choose to support them.’