Report: Consumers interested in mobile wallets, alternatives to banks
In a market subject to a certain level of hype, say mobile payments for instance, a healthy skepticism is warranted. But according to a new study by research firm Carlise & Gallagher, there may be some reason for enthusiasm. The study found that nearly half of consumers (48 percent) expressed an interest in mobile wallets as well as a strong interest in other services included in mobile wallets such as loyalty and incentive programs. Additionally, many of those consumers said they would look to "non-bank" providers like PayPal and Google to provide mobile wallet and banking services.
"The competitive threat [to banks] from new entrants is real," said Peter Olynick, CG's practice leader for Card and Payments. "Consumers are open to considering alternatives to their primary banks to provide mobile wallets and even core banking services."
Consumers have already slowed cash and check use in favor of credit and debit cards, Olynick said, and half of today's smart phone users will be using their phones and mobile wallets as their preferred method for payments within five years.
"These customers will be using better tools to help them optimize transaction choices. Banks need to proactively consider how their products will stay 'top of wallet' in the new mobile wallet world," Olynick said.
Findings in the study included:
- Of the 48 percent of respondents who expressed an interest in a mobile wallet, interest is "driven by both young consumers and affluent consumers." That group includes 76 percent who are currently using or intend to use mobile banking today
- Eight in ten respondents expressing an interest in mobile wallets said they would use PayPal's mobile wallet services. Six in ten said they would use a mobile wallet product from Google. Six in ten also would use an Apple mobile wallet.
- The ability to make better payment choices, including maximizing loyalty programs or minimizing interest payments was cited by 65 percent of respondents as the most valued mobile wallet service.
CG said consumer unhappiness with current payment methods is a strong driver of interest in mobile wallets. For instance, consumers cited issues like the inability to manage offers and incentives, or keep track of payment due dates, as frustrations.
"Banks need to ease the pain points with their mobile wallet features to retain customers," said Olynick. "We advise banks to update their core transaction processing capabilities today so they will be ready to provide improved transaction and shopping experiences in their mobile wallets tomorrow."
The online poll included 605 respondents in the U.S.
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