Tag: Federal Reserve

Relatively few consumers are using their mobile devices to purchase products online and in physical stores

Mobile payments has become a powerful force in the retail sector, but many consumers remain loyal to conventional forms of commerce. During the holiday season, many retailers saw a significant increase in the number of mobile shoppers they served, but number of mobile consumers was lower than what many companies had been anticipating this year. According to data from Bankrate, only 14% of smartphone owners in the United States actually used their device to make a mobile payment during the Thanksgiving shopping weekend.

28% of smartphone owners made a mobile payment during 2015

Information from the Federal Reserve also highlights the relatively sluggish activity being seen in the mobile payments space this year. According to the agency, only 28% of smartphone users made a mobile payment throughout 2015. Mobile payments were particularly popular among millennials, who have become quite comfortable with mobile technology in general. Older consumers have been slow to embrace mobile payments, largely due to security concerns and basic disinterest.

Security continues to be a major problem for the mobile payments space

Security has been a cause for concern within the mobile payments space for years. Many consumers have expressed worry that their financial information could be at risk if they make a mobile payment. Retailers and companies responsible for mobile payment platforms have been working to ensure consumer information is kept safe, but sophisticated cyber attacks has made this a relatively difficult endeavor to accomplish. In order for mobile payments to thrive, security measures must be improved, ensuring that the financial data of consumers is guarded against exploitation.

More consumers are expected to make a mobile transaction as new services become available

While the mobile payments sector may have seen relatively slow growth during this year’s holiday season, stakeholders in the growing market expect to see more robust growth in 2016. Next year, promising new mobile payments platforms are expected to enter into new markets, where they will find a consumer base that is willing and eager to use their mobile devices to make purchases.

More than half of smartphone owners in the United States currently use this type of app and service.

According to recently released survey data from the Federal Reserve and an analysis conducted by Business Insider, about half of all smartphone owning American adults are now using mobile banking in some form, but at the same time, there is still a long way to go before it can be considered to be truly mainstream.

Among the general population, not just smartphone owners, the uses of these services is considerably lower.

The data showed that in 2013 the percentage of American smartphone owners who were using mobile banking services was about 51 percent. By the same time the next year, it had risen to only 52 percent. While it is growing, and while this does mean that more than half of all of these individuals users are also taking advantage of these services, it shows that the rate of growth is very slow and there is still a great deal of room for this type of usage to improve.

The fastest mobile banking penetration growth is occurring more quickly specifically among smartphone users.

The general population may not be seeing a rapid growth, but when taking a more focused look at the people who actually have the devices, there was a rate of increase of 6 percent, compared to the tiny 1 percent seen by the general population.

When looking at American adults who have bank accounts, regardless of whether or not they were smartphone owners, there was a 5 percent increase in the use of banking services over mobile devices. Across the entire American population, the penetration of banking over mobile devices reached 34 percent in 2014.

It was pointed out that it is very unlikely for feature phone owners to try to use mobile banking services will see much of an increase. The reason is that banks have not been releasing the types of apps that would be usable in feature phones, when the population is rapidly making the transition over to smartphones and the vast majority of device owners have that specific type of cell phone.