The analysis and conclusions set forth in this presentation represent the work of the author and do not indicate concurrence of the Federal Reserve Board, the Federal Reserve Banks, or their staff. Mention or display of a trademark, proprietary product, or firm in the presentation by the authors does not constitute an endorsement or criticism by the Federal Reserve System and does not imply approval to the exclusion of other suitable products or firms. 1
Motivation for Report • How consumers access financial services is evolving: – Rapid increase in use of mobile banking and mobile payments in only a few years • These changes have the potential to affect consumer finances and consumer behavior • May also provide a means of promoting economic inclusion and expanding financial access to the unbanked or underbanked • Report released March 2014 (http://www.federalreserve.gov/econresdata/consumers -and-mobile-financial-services-report-201403.pdf)
Survey Background • Board conducted three consecutive surveys (in 2011, 2012 and 2013) to monitor these developments in mobile finance and assess consumer perceptions/expectations. Presented are the results from the 2013 survey. • Deployed by GfK to their nationally representative probability-based online panel of respondents called KnowledgePanel. For the 2013 survey: – Data collection from December 6 th , 2013 to December 23 rd , 2013. – Total of 2,657 respondents: 1,409 of whom had responded to the 2012 survey and 1,248 were new respondents.
Key Numbers • Among all mobile phone users: – 33% used mobile banking in past 12 months – 17% used mobile payments in past 12 months • Among smartphone users (62% of mobile phone users) – 51% used mobile banking in past 12 months – 24% used mobile payments in past 12 months 4
Change in mobile banking and mobile payments 23% Mobile payments users (smartphones) 24% 24% 12% Mobile payments users 15% 17% 2011 2012 42% 2013 Mobile banking users (smartphones) 48% 51% 21% Mobile banking users 28% 33% 0% 10% 20% 30% 40% 50% 60% 5
Change in mobile banking and mobile payments 42% Mobile banking users (smartphones) 48% 51% 2011 2012 2013 21% Mobile banking users 28% 33% 0% 10% 20% 30% 40% 50% 60% 6
Mobile Banking Mobile Banking uses a mobile phone to access your bank or credit union account You can use mobile banking by: • Accessing your bank’s web page through the web browser • Via text messaging • Using a downloaded application 7
Mobile banking by age Total % 20.6 26.1 28.1 25.2 18-29 Yes 30-44 % 39.1 33.7 20.7 6.6 45-59 60+ No % 11.4 22.3 31.7 34.5 0 10 20 30 40 50 60 70 80 90 100 8
Mobile banking by race Total % 70 8.6 5.7 14.3 White, Non-Hispanic Black, Non-Hispanic Yes % 62.5 11.1 5.9 19.2 Other, Non-Hispanic Hispanic 2+ Races, Non-Hispanic No % 73.8 7.4 5.6 11.8 0 10 20 30 40 50 60 70 80 90 100 9
Mobile banking by income Total % 14.9 16.4 27.1 15.7 26 Less than $25,000 $25000,- $39,999 Yes % 10.4 16.5 27 17.4 28.8 $40,000 - $74,999 $75,000 - $99,999 Greater than $100,000 No % 17.1 16.3 27.1 14.9 24.6 0 10 20 30 40 50 60 70 80 90 100 10
When did you start using mobile banking ? 35% 31% 31% 30% 25% 20% 20% 15% 10% 9% 8% 5% 0% In the last 6 months 6 to 12 months ago 1 to 2 years ago More than 2 years ago I don't remember *n=640 11
What was the main reason why you started using mobile banking when you did? I liked the convenience of mobile banking 37% I got a smartphone 32% My bank started offering the service 16% I became comfortable with the security of mobile banking 6% There is no bank branch or ATM near my home or work 4% Other 2% To receive fraud alerts or check my account for fraudulent transactions 1% 0% 5% 10% 15% 20% 25% 30% 35% 40% *n=640 12
Using your mobile phone, have you done any of the following in the past 12 months? 2011 2012 2013 90% Checked an account balance or recent transactions 87% 93% 48% Downloaded your bank's mobile banking app 49% 72% 42% Transferred money between your bank accounts 53% 57% 26% Made a bill payment using banking website or app 27% 44% 33% Received a text message alert from your bank 29% 43% 21% Located the closest in-network ATM for your bank 24% 41% 11% Deposited a check using your mobile phone camera 21% 38% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 13
What are the main reasons you have decided not to use mobile banking? My banking needs are being met without mobile banking 89% I don't see any reason to use mobile banking 75% I'm concerned about the security of mobile banking 69% The mobile phone screen is too small 44% I don't have a smartphone 44% I don't trust the technology 35% It's too difficult to use mobile banking 17% I don't do the banking in my household 12% My bank charges a fee for using mobile banking 7% I don't have a bank account 4% *n=782 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 14
Assuming that the concerns that you have about using mobile banking were addressed, would you be interested in doing any of the following activities with your mobile phone? None, I don't want to use mobile banking 51% Check an account balance or check recent transactions 39% Receive text message or e-mail alerts from your bank 29% Transfer money between accounts 27% Download your bank's mobile banking app 26% Deposit a check electronically using your mobile phone camera 26% Make bill payments 25% *n=782 0% 10% 20% 30% 40% 50% 60% 15
Age distribution for individuals who would not mobile bank, even if their reasons for not mobile banking were addressed 7% 39% 23% 18-29 30-44 45-59 60+ 31% 16
Potential for Growth • 12% of those not currently using mobile banking think that they will probably use it within the next 12 months • 20% of those who don’t think they will adopt mobile banking within 12 months indicate that they are likely to do so eventually • Higher rates of use among smartphone users imply that as smartphone adoption grows so too will use of mobile commerce 17
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What kinds of alerts (text message or email) do you receive? Low-balance alerts 52% Statement available notification 49% Payment due alerts 42% Deposit or withdrawal alert 41% Fraud alerts 38% Credit card balance alerts 25% Saving reminders 8% Other 4% *n=400 0% 10% 20% 30% 40% 50% 60% 19
Thinking of the most recent low-balance alert you received, which of the following actions did you take after receiving the alert? Transferred money into the account with the low balance 47% Reduced my spending 37% Deposited money into the account with the low balance 32% None 19% *n=201 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 20
Mobile Payments Mobile payments are purchases, bill payments, charitable donations, payments to another person, or any other payments made using a mobile phone You can make payments by: • Accessing a web page through the web browser on your mobile device • Sending a text message (SMS) • Using a downloadable application on your mobile device The amount of the payment may be: • Applied to your phone bill (e.g. text message donation) • Charged to your credit card • Withdrawn directly from your bank account 21
Mobile payments by age Total 21.8 26.6 27.4 24.3 18-29 30-44 Yes 35.7 32.6 21.4 10.4 45-59 60+ No 18.9 25.3 28.6 27.2 0 10 20 30 40 50 60 70 80 90 100 22
Mobile payments by race Total 68.1 10.5 5.7 14.4 White, Non-Hispanic Black, Non-Hispanic Yes 49 21.2 5.3 22.1 Other, Non-Hispanic Hispanic 2+ Races, Non-Hispanic No 72.1 8.2 5.8 12.8 0 10 20 30 40 50 60 70 80 90 100 23
Mobile payments by income group Total 17.1 16.9 25.9 15.2 24.9 Less than $25,000 $25000,- $39,999 Yes 13.8 19.3 28.4 14.6 23.9 $40,000 - $74,999 $75,000 - $99,999 Greater than $100,000 No 17.8 16.4 25.4 15.3 25.1 0 10 20 30 40 50 60 70 80 90 100 24
When did you start using mobile payments? 30% 25% 25% 20% 20% 18% 18% 15% 15% 10% 5% 0% In the last 6 months 6 to 12 months ago 1 to 2 years ago More than 2 years ago I don't remember *n=372 25
What was the main reason why you started using mobile payments when you did? I liked the convenience of mobile payments 37% I got a smartphone 26% The ability to make mobile payments became available 14% I became comfortable with the security of mobile payments 7% Other 7% Refused to answer 4% To take advantage of loyalty or rewards points and discounts 4% A store I visit started offering the service 2% *n=372 0% 10% 20% 30% 40% 26
Changes in types of mobile payments made (Among those who made mobile payments) 2011 2012 2013 36% Made an online purchase 35% 59% 23% Paid bills online through a mobile web browser or app 42% 64% 1% Scanned a barcode or QR code using mobile phone to make a mobile payment 9% 21% 21% Transferred money directly to another person's bank or other financial account 30% 39% 8% Received money from another person's bank or other financial account 15% 29% 2% Waved or tapped my mobile phone at a cash register 6% 8% 16% Made a payment using a text message 8% 14% 27
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