Mobile payments have more than doubled in popularity, reaching over 33 percent of U.S. residents according to the results of a report, Business Strategy: Results from the 2012 Consumer Payments Survey by IT research firm IDCs Financial Insights division. More than half of those who made a mobile payment used PayPal Mobile (56 percent), with Amazon Payments and Apple’s iTunes service statistically tied at about 40 percent, according to the report.
More respondents reported buying physical goods with their phones than online services, digital goods, or virtual currency, despite the general popularity of digital downloads, such as applications and music, the report noted. For the second consecutive year, both biller and bank-operated online bill pay sites were used by more than 50 percent of the respondents. Overall the report found nearly three-quarters (73.5 percent) of U.S. consumers now use online bill payment, indicating online bill payment is now the dominant way to pay bills in the U.S.
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, Aaron McPherson, practice director of IDC Financial Insights said in a prepared statement. 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.
A May 2011 IDC Financial Insights study, which focused on usage of emerging payment technologies, 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, the report noted. 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.
Despite the rise in mobile payments and mobile services in general, the vast majority of people using mobile technology today say that they do not necessarily trust it, according to Juniper Networks Trusted Mobility Index survey in May. In the report, 63 percent of mobile phone owners said they are at a crossroads and simply do not know if they should trust that their mobile experiences are secure. Just 15 percent of respondents have a great deal of confidence in the security of their mobile devices and services.
The report also warned that this dearth of faith in mobile security could hamper growth in the industry as users who experience a security breach drop services or devices, noting that the majority of people (71 percent) said they would stop using critical services like online banking (78 percent).