Mobile Payments: User Demographics, Top Activities and Incentives, and More…

June 2, 2016

This article is included in these additional categories:

African-American | Boomers & Older | Digital | Financial Services | Hispanic | Mobile Phone | Promotions, Coupons & Co-op | Youth & Gen X

PewCharitableTrusts-Demo-Composition-Mobile-Payments-Users-June2016Mobile payment users tend to skew young, with more than 7 in 10 belonging to the Millennial (39%) or Gen X (33%) generations, reports the Pew Charitable Trust in recently-released results of a survey conducted by SSRS. The data also reveals that compared to non-users, mobile payment users tend to have higher incomes and higher levels of education.

Indeed, roughly 4 in 10 mobile payments users have incomes of at least $75k, almost double the proportion (22%) of non-users. And more than one-third (36%) have at least a college degree, versus one-quarter of non-users.

Not surprisingly, mobile payments users also more likely to be banked, as only 9% are in the realms of the unbanked, compared to 20% of non-users.

The survey defined mobile payments as the use of a smartphone to make payments or send and receive money. Respondents overall were most likely to be aware of using smartphones to make a purchase (72% at least having heard of this), closely followed by the 68% who had heard of using a smartphone to pay bills. There was less awareness of the other activities measured: 46% had not heard of sending or receiving money via smartphone, and 48% likewise hadn’t heard of making a payment using a text message.

As one might expect given the youth skew in mobile payment use, Millennials were generally the most likely to have performed these actions. A slight majority (52%) reported having made a purchase via smartphone (versus the 44% adult average), while 43% said they have used their smartphone to pay bills (versus the 33% adult average).

Interestingly, while Millennials were also the most apt to say they had used a smartphone to send or receive money (32% versus the adult average of 22%), it was Gen Xers who were most likely to say that they had made a payment using a text message (17%, compared to the 12% average).

In a recent study on marketing financial services to Millennials, MarketingCharts found that mobile payments have become so popular with youth, that they are a more common payment method than credit cards among 18-24-year-old college students.

Millennials (18-34) are also the most likely to show interest in various mobile payments incentive programs:

  • 70% are interested in using mobile payments in order to receive rewards or discounts (compared to the 53% adult average);
  • 62% are interested in avoiding paying overdraft or check cashing fees (versus the 47% average);
  • 57% are interested in receiving electronic alerts or receipts (compared to the 43% average); andM
  • 54% are interested in using mobile payments to budget or control spending (versus the 35% average).

In each case, there was a strong age gap, with Gen Xers (35-50) hewing fairly close to Millennials (and above the adult average) in their levels of interest, Baby Boomers (51-68) showing slightly below-average interest, and very low comparative levels of interest from Silents (70-87).

Meanwhile, the biggest barrier to mobile payments use across generations is a concern about loss of funds or identity theft. Indeed, fewer than 1 in 10 respondents agree that mobile payments are safer than other payment methods, though 53% said they were unsure. Other data, from GfK, similarly finds few US adults believing that mobile payments are more secure than other methods. In fact, while users – unsurprisingly – have more favorable perceptions of mobile payments than non-users, only 1 in 7 users in the Pew Charitable Trusts survey agreed that mobile payments are safer than other payment methods.

When it comes to regulation of data, more than 8 in 10 respondents believe that consumers should be allowed to request that their data by permanently deleted. More than 8 in 10 also feel that consumers should be allowed to view their data profile and make changes and likewise that companies should be required to disclose how data are stored and used.

Slightly fewer than half, though, feel that companies should not be allowed to collect payments data. In terms of who should have access to payments data:

  • A slim majority (52%) feel that the payment sender should have access;
  • Slightly fewer than half (46%) feel that the payment recipient should have access; while
  • Only a fraction feel that phone carrier (25%), phone manufacturer (11%), app developer (11%) and advertisers (5%) should have access to the data.

For more data on Millennials’ use of mobile payments and financial services in general, see MarketingCharts’ recent report on the topic, available for purchase here.

About the Data: The report describes its methodology as follows:

“On behalf of The Pew Charitable Trusts, Social Science Research Solutions (SSRS) conducted a nationally representative random-digit-dialing telephone survey of 2,010 adults from Oct. 2 through Nov. 3, 2015. The margin of sampling error, including the design effect, is plus or minus 2.6 percentage points. SSRS conducted 1,029 interviews via cellphone and 132 in Spanish.”

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