Written by [Jane Adams]A couple of weeks ago I wrote about the results of the consumer research we carried out in the US when we asked consumers who they most trusted to issue mobile wallets. We also asked the same question in the UK and the results were a little more encouraging. Here only 42% said they would never use a wallet, meaning 58% would.
This 58% figure in favour is in contrast to the 64% of US consumers who say they would never use a mobile wallet.
Consumers were asked who they would trust most to issue a mobile wallet: banks, phone companies, Google or major retailers, with a final option of saying no-one because they would not use such a service. The most trusted issuers for UK consumers were banks at 34%, followed by Google at 14%, mobile operators at 6% and retailers such as Debenhams at 4%. In contrast US figures were banks at 20%, followed by Google at 10%, retailers such as Walmart at 3% and phone service providers at 2%.
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Most trusted issuer of mobile wallets- UK – source: Consult Hyperion
Both age and gender made a difference to results with British men being more willing to use a wallet – only 37% said they never would against 44% of British women. Younger people were more open to the idea than the older generation with the group most likely to use wallets being men of 18-14 at 73% whereas the group least likely to was women aged 55-64 at 31%. In contrast, 18-24 year old men in the US were one of the most conservative groups with 71% saying they would never use a mobile wallet. This possibly may reflect a lack of ease with financial services in that age group rather than technology though.
The group most likely to trust banks in the UK were the 35-44 year olds, whereas 18-24 year olds were the group most in favour of Google. The only demographic segment that favour retailers as issuers were women aged 25-34, but even for them retailers came second behind banks as the preferred issuer.
Scots were least likely to consider using a wallet whereas the English were most likely. As a Scot by adoption I’m backing rapidly away from that finding except to say that clearly conservatism in general has a lot to do with rates of new product uptake and while Scotland couldn’t be less Conservative, it is, especially outside the Central Belt, fairly conservative.
What could be the reason for the fairly striking headline difference with the US? Again, in many respects, the US is more conservative than the UK, especially with respect to financial services. Cheques are still widely used and while we have Faster Payments, it has recently emerged that US banks stopped a similar proposal being developed. With no commonly used Chip & PIN (yet), many may find no particular reason to stop using credit cards at the point of sale.
In addition, UK consumers are a lot more at home with mobile banking than those in the US. Recent figures from the Office of National Statistics show that over half of UK adults use mobile banking, whereas according to the Federal Reserve, the equivalent US figure is 21%. So it makes sense that there might be more hesitance about mobile payments too.
Pingit’s success may have paved the way in Britain too.
Overall though, our main conclusion about the US holds for the UK too. A key marketing challenge for any mobile wallet issuer is to come up with a narrative or metaphor that makes sense to the consumer. Then they need to identify the pain points for the consumer and use that as a way in. Personally, I think that rather than loyalty and couponing, that is online payments. Despite how much 3D Secure has improved in recent times, it's still easier to use PayPal. That ease is what wallets need to emulate.
Incidentally, we’ve had a number of comments on the lines that it was a shame that we didn’t include PayPal in the research as an option. All I can do is agree. Although our initial motivation was mainly to see how banks lined up against MNOs and retailers, it would have been very interesting to see how the results might have differed. In fact that’s given me an idea for some more research…
I am very much surprised to see that the mobile OS providers are not included as one of the option in the survey (likes of Apple, Google Android). They have already gained acceptance and consumers are willing to share their payment credentials.
[Jane Adams] It was simply a result of only being allowed a very limited number of options by the research software. We’d have liked to include them just as much as PayPal (although I imagine most consumers would be unlikely to distinguish between Google and Android).
ok.. I think that having Apple in the options could have significantly changed the research results
Given the fact there is always a very good adoption for Apple products
When we (Mintel) asked a similar question back in Feb 2012 about who people would rather use for various mobile wallet-related services, Paypal were a long, long way behind the banks.
The most surprising finding was that even when we asked about using your mobile to transfer small amounts of money to friends, people would still prefer to be able to use a bank. This was true even among Paypal users.
So banks are probably still streets ahead when it comes to the “money” side of mobile wallets.
But payments alone won’t be enough to convince people to change their habits. Despite what Dave Birch thinks, I still believe that for most people, current payment options are good enough for their day-to-day needs.
So I really don’t think that this gives the banks any grounds for complacency. It’s easy to imagine a bank offering that gets payments right, but that is leapfrogged by a non-bank solution that has nailed the non-payment side of the product. If the other elements are right, then consumers will quickly get over any reservations about using non-banks for payments.