A new Street Fight poll of 513 U.S. consumers says close to 77% of respondents do not rely on their mobile phones to pay for goods and services. But our results also illustrate a strong rate of adoption for the key 18-34 demographic that may indicate future growth as the group ages and others move into the demographic.
According to our poll, 23% said they prefer to pay via a mobile phone, while more than 45% said otherwise; almost a third of respondents reported not owning a smartphone. Similarly, 22% of all respondents said they are more likely to buy products and services from a merchant who accepts mobile payments; 46% were indifferent. Awareness of such services remains limited, with fewer than 10% writing in PayPal and Google as mobile payments services they would prefer to use. (Third-party opinions site Toluna QuickSurveys conducted the survey on behalf of Street Fight.)
Age plays a huge factor in awareness and adoption of mobile payments. A tech-savvy younger consumer base is increasingly reliant on mobile payments, with 44% of respondents aged 18-34 saying they prefer to pay via a mobile phone. Only 15% of this demographic does not own a smartphone. Meanwhile, older demographics are slower to adopt — fewer than 8% of respondents over 55 said they prefer to use mobile payments. Along that line, 43% of those 18-34 are more likely to shop at a business that accepts mobile payments, but only 7% of those 55+ said they would do so.
Dozens of companies, ranging from credit card providers and search giants to startups and big-box retailers, are diving head first into the space. In August, Square, run by Twitter co-founder Jack Dorsey, partnered with Starbucks, which also invested $25 million in the San Francisco-based startup, meaning Square would process credit and debit card transactions at 7,000 Starbucks locations. Less than two weeks later, Walmart, Target, Best Buy and 10 other big-name retailers formed the Merchant Customer Exchange to develop their own mobile wallet system. Startups like SCVNGR, LevelUp, GoPago and others round out the mobile payments space.
Despite the long list of providers, adoption has been slow, on par with our results. There are many layers — merchants, banks, credit card companies, smartphone providers and the like — to consider, and consumers remain unable to pay via their mobile device at most businesses. At the same time, smartphone penetration, though hovering at a healthy 50% or so, still has room for growth; Javelin Strategy & Research projects 72% of mobile phone users to own smartphones by 2016. Even software giant Apple did not include mobile wallet-required NFC chips in its new iPhone 5.
Tech research firm Forrester has projected the mobile payments industry will reach a critical mass within three to five years, according to a New York Times report. And our results indicate that eventual consolidation and standardization among providers, combined with merchant adoption, will see continued preference for mobile payments.
Patrick Duprey is an editorial assistant with Street Fight.