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Consumers and Mobile Financial Services 2014 Consumers and Mobile Financial Services 2014 March 2014 B OARDOF G OVERNORSOFTHE F EDERAL R ESERVE S YSTEM Consumers and Mobile Financial Services 2014 March 2014 B OARDOF G OVERNORSOFTHE F EDERAL R ESERVE S YSTEM This and other Federal Reserve Board reports and publications are available online at www.federalreserve.gov/publications/default.htm. To order copies of Federal Reserve Board publications offered in print, see the Board’s Publication Order Form (www.federalreserve.gov/pubs/orderform.pdf) or contact: Publications Fulfillment Mail Stop N-127 Board of Governors of the Federal Reserve System Washington, DC 20551 (ph) 202-452-3245 (fax) 202-728-5886 (e-mail) [email protected] iii Preface The survey and report were prepared by the Con- R. Gerdes, Linda Healey, Bob Hunt, Chris Olson, sumer and Community Development Research Sec- Samantha J. Pelosi, Anjana Ravi, Aaron Rosenbaum, tion of the Federal Reserve Board’s Division of Con- Scott Schuh, and Dick Todd provided valuable com- sumer and Community Affairs (DCCA). ments and feedback on the design of the survey and drafting of this report. Comments and feedback were DCCA directs consumer-related functions performed also provided by Federal Deposit Insurance Corpora- by the Board, including conducting research on tion staff, including Karyen Chu, Keith Ernst, and financial services policies and practices and their Yazmin Osaki. Finally, several members of the implications for consumer financial stability, commu- Mobile Payments Industry Workgroup provided nity development, and neighborhood stabilization. valuable input, including Mehul Desai, Dee O’Malley, and Ginger Schmeltzer. DCCA staff members Maximilian D. Schmeiser, Matthew B. Gross, David E. Buchholz, and Alejan- Mention or display of a trademark, proprietary dra Lopez-Fernandini prepared this report. Federal product, or firm in the report does not constitute an Reserve System staff members Jason Berkenpas, endorsement or criticism by the Federal Reserve Alexandra M. Brown, Matthew Chen, Julia Cheney, System and does not imply approval to the exclusion Douglas Conover, Marianne Crowe, Ellen Merry, of other suitable products or firms. Allen Fishbein, Chris Foote, Kevin Foster, Geoffrey v Contents Executive Summary ................................................................................................................. 1 Introduction ............................................................................................................................... 3 Survey Background .................................................................................................................... 3 Overview of the Mobile Phone Market .......................................................................................... 4 Trends in the Utilization of Mobile Banking and Payments ............................................................. 4 Accessing Financial Services ................................................................................................ 7 Mobile Banking ........................................................................................................................... 7 Mobile Payments ...................................................................................................................... 11 Mobile Security ......................................................................................................................... 15 How Mobile Phones Affect Shopping Behavior .......................................................... 17 Interest in Mobile Services ......................................................................................................... 17 In-Store Product Research and Price Comparison ...................................................................... 17 Use of Mobile Phones in Financial Decisionmaking ................................................ 19 Conclusion ................................................................................................................................ 21 Appendix 1: Technical Appendix on Survey Methodology ..................................... 23 Appendix 2: Survey of Consumers’ Financial Decisionmaking Using New Technologies—Questionnaire .................................................................................. 25 Banking Section ........................................................................................................................ 25 Mobile Banking Users ............................................................................................................... 32 Mobile Payments Users ............................................................................................................. 34 Non-Mobile Banking Users ........................................................................................................ 37 Non-Mobile Payments Users ..................................................................................................... 39 Appendix 3: Consumer Responses to Survey Questionnaire .................................. 47 1 Executive Summary Mobile phones have increasingly become tools that —The most common use of mobile banking is to consumers use for banking, payments, budgeting, check account balances or recent transactions and shopping. Given the rapid pace of developments (93 percent of mobile banking users) in the area of mobile finance, the Federal Reserve —Transferring money between an individual’s own Board began conducting annual surveys of consum- accounts is the second-most common use of ers’ use of mobile financial services in 2011. The sur- mobile banking (57 percent of mobile banking vey examines trends in adoption and use of mobile users) banking and payments, and how the emergence of mobile financial services affects how consumers inter- —38 percent of mobile bankers have deposited a act with financial institutions. check using their mobile phone in the past 12 months, up from 21 percent in 2012 This report presents findings from the 2013 survey, which examined consumers’ use of mobile technol- —Of those using mobile banking, the frequency of ogy to access financial services and make financial use has gone down, from a median of six times decisions. The findings from the current survey are per month in 2012 to four times per month also compared with the findings from the 2011 and in 2013 2012 surveys. Topics include consumer access to —Among those who own mobile phones, there is bank services using mobile phones (“mobile bank- no clear correlation between mobile banking ing”), consumer payment for goods and services usage and either income or education level using mobile phones (“mobile payments”), and con- sumer shopping decisions facilitated by use of mobile • Mobile phones are also changing the way consumers phones. Key findings of the 2013 survey include: make payments • Mobile phones are in widespread use —17 percent of all mobile phone owners have made a mobile payment in the past 12 months, —87 percent of the U.S. adult population has a up from 15 percent in 2012 mobile phone —The share of smartphone users who have made a —61 percent of mobile phones are smartphones mobile payment in the past 12 months has effec- (Internet-enabled) tively remained constant at 24 percent • The ubiquity of mobile phones is changing the way —The most common mobile payment was bill pay- consumers access financial services ment through an online system (66 percent of —33 percent of all mobile phone owners have used mobile payment users, up from 42 percent in mobile banking in the past 12 months, up from 2012) 28 percent a year earlier —17 percent of all smartphone users have made a —51 percent of smartphone owners have used point-of-sale payment using their mobile phone mobile banking in the past 12 months, up from in the past 12 months, up from 6 percent in 2012 48 percent a year earlier —39 percent of people who made point-of-sale —12 percent of those mobile phone users who are mobile payments did so by scanning a barcode not currently using mobile banking think that or QR code displayed on their phone’s screen at they will probably use it within the next the cash register, while 14 percent waved or 12 months tapped their mobile phone at the cash register 2 Consumers and Mobile Financial Services 2014 —Among those who own mobile phones, there is changed where they purchased the product as a no clear correlation between mobile payment result of the information they found usage and either income or education level —42 percent of smartphone users have used their • Among consumers who do not use mobile financial phone to browse product reviews or get product services, the principal reasons cited for not using the information while shopping at a retail store, and services are perceptions of limited usefulness and 74 percent of them changed the item they pur- benefits, and concerns about security chased based on this information —Of those not using mobile banking, the primary —69 percent of mobile banking users have checked reason people cited was a belief that their bank- their account balance before making a large pur- ing needs were being met without the use of chase in the past 12 months, and half of them mobile banking (89 percent of non-users) decided not to purchase an item as a result of —The primary reason people gave for not using their account balance or credit limit mobile payments was that they believe it is easier —24 percent of smartphone users have used their to pay with cash or credit/debit cards (76 percent
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