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PREVIEW OF Mobile Banking, Mobile Payments— What Consumers Value

© 2015 RateWatch | Sales and Service: 1.800.348.1831 | www.rate-watch.com Contents Introduction...... 4 1. Which type(s) of (s) do you currently use for your banking needs? Results – Total Respondents...... 5 Results – Gender, Age and Income...... 6 2. On average, how often do you visit a physical for banking? Results – Total Respondents...... 7 Results – Gender, Age and Income...... 8 3. On average, how often do you access ? Results – Total Respondents...... 9 Results – Gender, Age and Income...... 10-11 Section 1: Mobile Banking 4. On average, how often do you use mobile banking? Results – Total Respondents...... 13 Results – Gender, Age and Income...... 14 5. Why do you not use mobile banking? Results – Total Respondents...... 15 Results – Gender, Age and Income...... 16 6. How likely are you to use mobile banking in the next 12 months? In the next 13-36 months? Results – Total Respondents...... 17 Results – Gender, Age and Income...... 18 7. Which mobile banking features do you use now or would be interested in using, if made available to you, in the next 12 months? Results – Total Respondents...... 19 Results – Gender, Age and Income...... 20-21 8. Which mobile banking feature is the most important to you? Results – Total Respondents...... 22 Results – Gender, Age and Income...... 23-24 9. What features of mobile banking do you currently pay for or would consider paying for? Results – Total Respondents...... 25 Results – Gender, Age and Income...... 26-30 10. How often do you use the following within your mobile banking: Results – Total Respondents...... 31-32 Results – Gender, Age and Income...... 33-39 11. What concerns do you have regarding mobile banking security? Results – Total Respondents...... 40 Results – Gender, Age and Income...... 41 Section 2: Mobile Payments 12. On average, how often do you use mobile payments? Results – Total Respondents...... 43 Results – Gender, Age and Income...... 44 13. If you were offered the option of using your to pay for purchases in store, how likely would you be to use it? Results – Total Respondents...... 45 Results – Gender, Age and Income...... 46

Mobile Banking, Mobile Payments — What Consumers Value | Page 2 Contents

Section 2: Mobile Payments Continued 14. When using your mobile payments app, which source(s) of funds do you use to complete (pay for) your transactions? Results – Total Respondents...... 47 Results – Gender, Age and Income...... 48 15. What is your primary payment source? Results – Total Respondents...... 49 Results – Gender, Age and Income...... 50 16. Why is [Q15] your primary payment source? Results – Total Respondents...... 51 Results – Gender, Age and Income...... 52-54 17. Which of the following services have you used in the past 12 months? Results – Total Respondents...... 55 Results – Gender, Age and Income...... 56 Section 3: Demographics Gender...... 58 Age...... 58 Education...... 59 Income...... 59 Region...... 60

Mobile Banking, Mobile Payments — What Consumers Value | Page 3 Introduction

Value is key. Attaining and retaining customers is dependent on the In May of 2013, RateWatch commissioned a consumer based survey value provided to them. For financial institutions, this could be in on technology studying behaviors and preferences. Specifically the rates offered, the fees charged (or not), or the level of customer looking at Mobile Banking usage, we found that in the last two years service provided. And with increasing prominence, value is seen usage has increased only 2.02% (from 61.80% to 63.82%). But those in the convenience added to customers’ lives through services like that are using mobile banking, are using it more. In 2013, 37.3% mobile banking. said they use mobile banking at least once per week and two years later that number has risen to 45.15%. And overall, mobile banking This survey aims to understand consumers’ use and views of mobile feature usage has increased dramatically. The once unknown Person- banking as well as the burgeoning service of mobile payments. 2-Person Payments and Account-2-Account Transfers have increased Survey responses were obtained through a third party service with 21.6% and 16.7% respectively. The highest increase was to Bill Pay questions distributed January 29 to January 30, 2015 to consumers with nearly a 30% increase. ages 18 and older throughout the United States. 711 total unique responses were received with 651 having completed the full survey. Every indication is, that as long as safety concerns are addressed, consumers will continue to increase their demand for mobile General thought is that financial institutions are slow to keep up with banking and the ability to easily, conveniently make purchases changing technology. But in an environment where competition is and manage their money. In a recent study by Carlisle & Gallagher fierce not only among the institutions themselves, but increasingly Consulting Group, the top three factors that influenced the use of with "non-bank" institutions, the light has been seen – over 80% are mobile banking were ‘ease of use’ (72%), ‘ease of making payments’ currently offering mobile banking and of those that don’t, over 50% (65%) and ‘better features’ (65%). And it’s not just for the young. plan to roll it out this year. And they seem to be ahead of consumers. Those over 60 are more likely to use mobile banking for Bill Pay than any other age group.

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Mobile Banking, Mobile Payments — What Consumers Value | Page 4 Survey Results — Total Respondents

Question 1: Which type(s) of financial institution(s) do you currently use for your banking needs?(Check all that apply)

47.26% Large

26.30% Those with less Regional Bank than a high school education are more 13.08% likely than any other Small Community Bank education level to select Internet 5.77% Internet Bank (no physical branch) for their banking needs. 18.75% bank 32.77% at Internet Banks compared to between 2.50% and 7.03% of 2.11% other education levels. Savings & 3.66% None of the above

# of Among Those with a Relationship at: Relationship Internet Bank Large National Bank Regional Bank Small Community Bank Credit Union Savings & Loan Types (no physical branch) 1 65.18% 59.36% 41.94% 29.27% 49.79% 20.00%

2 27.08% 30.48% 44.09% 43.90% 41.63% 40.00%

3 6.25% 8.02% 11.83% 19.51% 7.30% 20.00%

4 1.49% 2.14% 2.15% 7.32% 1.29% 20.00%

100% 100% 0% 100% 100% 100%

3 Relationships (3.52%) 4 Relationships (0.70%)

2 Relationships (21.80%)

Among Total Respondents

1 Relationship (73.98%)

Mobile Banking, Mobile Payments — What Consumers Value | Page 5 Survey Results — Total Respondents

Question 7: Which mobile banking features do you use now or would be interested in using, if made available to you, in the next 12 months? (Check all that apply)

100%

90% Compared to all other education levels, those 80% with a Graduate Degree are most likely to use Bill Pay (see chart below). 70%

60%

50%

40% Foreign language support

Response percentage Pay 30%

20%

10%

0.93% Other 91.36% 54.44% 79.21% 35.28% 19.16% 64.72%Bill Pay 43.93% 29.91% 27.57% 19.63% 10.75% 14.95% 50.00% 24.07%

Mobile Wallet Apply for a Loan

Make Loan Payments Receive Account Alerts Check Account Balances Capture Locate ATMs and BranchesWithdraw Cash from ATM

P2P Person-to-Person Payments A2A Account-to-Account Transfers Open a Checking or Transfer Between Your Own Accounts

Use Personal Financial Management Program

( that helps you manage your money/budget)

Use or Interest in Bill Pay - By Education levels

Less than high school High school diploma Some College, but no 2-year college degree 4-year college degree Graduate-level degree degree (7) (or GED) (17) degree (65) (33) (107) (79)

57.14% 35.29% 60.00% 69.70% 61.68% 83.54%

Section 1: Mobile Banking Mobile Banking, Mobile Payments — What Consumers Value | Page 6 Survey Results — Total Respondents

Question 13: If you were offered the option of using your mobile phone to pay for purchases in-store, how likely would you be to use it?

Approximately 1/3 of respondents are at least somewhat likely to use in-store mobile payments, while 1/3 are unlikely and 1/3 have no desire to make in-store mobile payments.

Very Likely (2.75%) Likely (8.67%)

V ery Lik el y, Li ke Will Not Use ly , S o m (32.77%) e w h a Somewhat Likely t L i k e (21.14%) l y

=

3

2

Total .

5 6 Respondents %

% Unli 4.67 kely, Very Unlikely = 3 Unlikely (13.95%) Very Unlikely (20.72%)

Section 2: Mobile Payments Mobile Banking, Mobile Payments — What Consumers Value | Page 7 More Surveys from RateWatch

RateWatch conducts surveys of both bankers and consumers across the country to keep up with new and evolving financial industry topics. Surveys are conducted online and responses are compiled into a report format with charts and graphs to easily review the findings. Results are displayed as a whole for all respondents and also broken out into cohort groupings. Visit our Industry Survey webpage to request more information or purchase a previously released survey.

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$149 Home & Auto Lending: Today's $299 Monetizing Mobile Banking For Customer Small Business Customers

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Mobile Banking, Mobile Payments — What Consumers Value | Page 8