MADISON, Wis. (3/7/12)--Growth in mobile banking and payments is being driven by younger consumers, according to a new study. Most adults are more reluctant to bank over their cellphones.
In an online survey of 504 U.S. debit cardholders conducted in January, Auriemma Consulting found that 40% of respondents had a cell phone capable of performing mobile-banking tasks. Of those, (84%) used their smartphone to bank within the previous year (PaymentsSource March 2).
Younger consumers are more likely to download a mobile-banking app. The study indicated that 43% of respondents younger than 45 had downloaded a mobile app from their financial institution within the previous year, while only about 22% of those older than 45 had done so.
Most respondents expressed some discomfort in making purchases with their mobile phones. About 47% said they were very or somewhat uncomfortable, 34% were very or somewhat comfortable, and 19% were unsure.
Among respondents younger than 45, about 48% said they were comfortable making purchases with their mobile phone, compared with 21% of those older than 45 who said the same.
The top reason respondents cited for their discomfort making purchases with their mobile phone was uncertainty about the technology's security (58%). That was followed by identity theft concerns (55%), fear of losing the phone and sensitive data (52%), "not needing a new way to make payments" (43%), distrust of the mobile-payment systems (34%), concern that it "may cost money" (27%), the belief that it "would not save any time" (21%) and they "do not understand it" (15%).
Saving time (51%) was the most common reason respondents listed for making payments through mobile, followed by "like new technology" (44%), it "would be free" (41%), it would create an option for a physical wallet (36%), they "understand it" (33%), it would provide greater security (31%), and it would be a more convenient way to pay (27%).
As the banking industry and other players develop products for banking and shopping with smartphones, "mobile payments are inevitable," Auriemma said.
About 75% of respondents with mobile-banking capabilities used their smartphone to check their account balance, 36% paid a bill, 32% received a bank notification, 31% paid by phone and also made a deposit, and 3% transferred funds. Some 17% of respondents said they made no mobile payments.
Until mobile banking and payments offer tangible consumer benefits such as saving time and money and provide a more-secure method for conducting transactions, mainstream consumer adoption is unlikely to materialize, Auriemma concluded.