Table of Contents
Executive Summary
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- The market
- Contactless cards have enjoyed huge recent growth…
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- Figure 1: Monthly contactless spend and average spend per card, 2014-16
- …paving the way for mobile payments
- PSD2 opens new opportunities for innovation
- Companies and brands
- A third of PayPal payments to be made on mobiles by the end of 2016
- Android Pay joins the competition
- The consumer
- NFC-enabled tech devices are mainstream
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- Figure 2: Smartphone ownership, by operating system, April 2016
- Use of contactless continues to grow
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- Figure 3: Use of payment methods, April 2016
- Paypal becomes an incumbent, while Apple Pay shows signs of growth
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- Figure 4: Awareness and use of selected mobile payment schemes, April 2016
- A third of smartphone users have made a mobile payment
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- Figure 5: Types of payments made through a smartphone in the last year, April 2016
- Incentives are the key to changing payment habits
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- Figure 6: Attitudes towards mobile payments, April 2016
- Data security is the biggest concern about mobile payments
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- Figure 7: Concerns over mobile payments, April 2016
- What we think
Issues and Insights
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- Security concerns are consumers’ biggest turn-off
- The facts
- The implications
- Incentives are the key
- The facts
- The implications
- A cardless, not cashless society
- The facts
- The implications
The Market – What You Need to Know
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- Contactless cards have enjoyed huge recent growth…
- …paving the way for mobile payments
- PSD2 opens new opportunities for innovation
Market Context
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- Contactless payments
- Contactless hits the mainstream…
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- Figure 8: Monthly contactless spend and average spend per card, 2014-16
- …but it took almost a decade to do so
- What does the growth of contactless mean for mobile payments?
- Mobile payment schemes
- The fragmented marketplace adds to consumer uncertainty
Regulatory and Legislative Changes
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- PSD2 increases the scope for innovations in payments and money management
Companies and Brands – What You Need to Know
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- A third of PayPal payments to be made on mobiles by the end of the year
- Android Pay joins the competition
- Innovations look to a cardless future
Peer-to-Peer Mobile Payment Services
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- PayPal
- Profile
- Recent activity
- Paym
- Profile
- Recent activity
- Pingit
- Profile
- Recent activity
Point-of-Sale Mobile Payment Services
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- Apple Pay
- Profile
- Recent activity
- Android Pay
- Profile
- Recent activity
- Barclays
- Profile
- Recent activity
- Starbucks
- Profile
- Recent activity
Innovation in Mobile Payment Services
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- Cash in a cardless society
- Android Pay Day offers rewards to incentivise use of Android Pay
- Barclaycard introduces instant card replacement
- Samsung Pay is on its way
The Consumer – What You Need to Know
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- NFC-enabled tech devices are mainstream
- Use of contactless continues to grow
- Paypal becomes an incumbent, while Apple Pay shows signs of growth
- A third of smartphone users have made a mobile payment
- Incentives are the key to changing payment habits
- Most people are uncomfortable with the cashless society
- Data security is the biggest concern about mobile payments
Mobile Device Ownership
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- It’s consumer apathy, not technology, that’s holding the market back
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- Figure 9: Mobile device ownership, April 2016
- Waiting for Android Pay to hit the high street
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- Figure 10: Smartphone ownership, by operating system, April 2016
How do People Pay?
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- Uptake of contactless payments shows how slowly habits change
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- Figure 11: Use of payment methods, April 2016
- Are contactless credit cards gaining more traction?
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- Figure 12: Use of payment cards, April 2016
- Cheques are still hanging in there
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- Figure 13: Use of non-card payment methods, April 2016
Awareness of Mobile Payment Schemes
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- PayPal: No longer a challenger brand?
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- Figure 14: Awareness and use of selected mobile payment schemes, April 2016
- Apple Pay: Signs of progress, especially among Apple Watch owners
- A fragmented market, with sizeable gaps in consumer awareness
- Age profile points towards PayPal’s incumbent status
- Higher levels of engagement among the more affluent…
- …and contactless card users
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- Figure 15: Use of selected mobile payment schemes, by use of contactless cards in the last three months, April 2016
Type of Payments Made Through a Smartphone
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- A third of smartphone users have made a payment using their phone
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- Figure 16: Types of payments made through a smartphone in the last year, April 2016
- 17% of people have used their mobile to pay in a shop or restaurant
- Payment is only of secondary interest when it comes to dedicated apps
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- Figure 17: Interest in smartphone services for restaurant apps, March 2015
- It’ll take incentives to rapidly shift consumer behaviour
- Peer-to-peer split between PayPal and bank apps
- Smartwatch owners have made the switch to mobile payments
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- Figure 18: Types of payments made through a smartphone in the last year, by devices owned, April 2016
Attitudes towards Mobile Payments – Pull Factors
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- Convenience isn’t enough to change payment habits
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- Figure 19: Attitudes towards mobile payments, April 2016
- Offer incentives, not convenience
- More than a payments app
Attitudes towards Mobile Payments – Security
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- Most people are uncomfortable with the cashless society
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- Figure 20: Attitudes towards mobile payments, April 2016
- Around a third of under-35s would pay through social media
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- Figure 21: Comfort using a social media or messaging app to pay friends and family or retailers, by age, April 2016
- Proving security is a hurdle that mobile payment providers must get over
Concerns Over Mobile Payments
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- Data security is the biggest worry…
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- Figure 22: Concerns over mobile payments, April 2016
- …and is shared regardless of contactless experience
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- Figure 23: Concern over security issues surrounding mobile payments, by contactless card use, April 2016
- Usability is a smaller worry, but could still hold back growth
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
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