A consumer study conducted in July 2011 by the Banking division of Simon-Kucher & Partners, global consulting firm specialising in pricing and marketing, has found that 92% of smartphone users would be willing to use mobile payments for their purchases and other forms of money transmission.
In addition, for four of the five types of mobile payment investigated, customers would also be prepared to pay a fixed fee of up to £3 to load a mobile wallet (mWallet) from which they could then make unlimited payments until the funds had been spent.
Mobile contactless payments were the most attractive format (70%) and overseas remittances the least (39%). These findings point towards a revenue opportunity for companies offering mobile payments.
Georg Wuebker, Global Head of Banking at Simon-Kucher & Partners, explains: “The results of this research are in line with research from VocaLink and Alcatel Lucent who have identified prices that customers would pay to make mobile payments. Our research is the first to drill into five different types of mobile payment and define the different price models that will - and will not - work in the market.”
The study also found that there were substantial differences in the preference for each of these payment types based on whether participants possess a smart phone. For example, 70% of smart phone users would try Contactless/NFC compared with 34% of respondents without a smart phone.
Ben Snowman, Director and author of the study says: “Smartphone users are clearly more advanced in their use of digital payment formats. In part, this may be due to the ease of access that smart phone users have to mobile applications giving them the ability to make payments. However, the differences in the willingness to use mobile payments clearly demonstrates that smart phone users do have a distinct mind set. For mobile payments to take off, banks, telecoms providers, merchants – all the beneficiaries – would do well in promoting the uptake of smart phones.”
Recently, OfCom the independent regulator and competition authority for UK communication industries, provided their annual report on Smart Phone usage in the UK. This found that the youth market is 50% more likely to own a smart phone compared with the UK average. As such, mobile payments are likely to be of greatest appeal to the youth market.