Mobile Banking, A Payments Channel
Navigator Edition: July 2017
By: Melissa Fox, Emma Causey, Chris Razzano, & Caleb Marley
Fifty-eight percent of U.S. smartphone users have downloaded a mobile app for their primary checking account, and 50% of U.S. smartphone users (including 68% of those under 35 and 31% of those 55 and over) are active users. 75% of mobile banking users log in weekly, primarily to check their balances/transaction history.
These figures are among the findings from the latest edition of our ongoing Study on Mobile Banking & Payments, which tracks consumer adoption of mobile banking and payments. Findings are based on results from an April 2017 survey of 1,503 U.S. consumers, age 18 and over, who have a smartphone and a banking relationship.
Findings from the study suggest that:
1. Mobile banking is expanding from a passive monitoring channel to an active transaction channel.
- The primary reason consumers log in to mobile banking is to check their balances and/or transaction history, cited by 95%+ of mobile banking users.
- Younger mobile banking users demonstrate a greater willingness to transact via mobile banking, however: they are more likely than older consumers to have deposited checks, transferred funds, and sent P2P payments (see Figure 1).
2. FI-backed Zelle is well-positioned to compete against non-bank incumbents in the P2P space.
- More than half (54%) of respondents say they have made a mobile P2P payment in the last year, primarily using a non-FI service.
- PayPal has the highest reported adoption among non-FI services, followed by Western Union, although Venmo ranks #2 for those under 35.
- Zelle will likely help FIs deliver many of the capabilities desired by customers:
- The most frequently cited improvements to FI P2P services are faster funds transfers and easier payee identification and setup.
- Security and ease of use are the most important factors when making P2P payments, followed by easy transfer of funds to/from a bank account and speed of payment (see Figure 2).
- Apple Pay and Venmo have announced extended capabilities that attempt to bridge the gap between P2P and the POS, but it remains to be seen whether consumers will consider that an adequate substitute for a bank account.
3. Faster payments initiatives will help FIs deliver the speed and control that consumers expect in a digital environment.
- 37% of respondents have paid a bill using their mobile device: 32% have used their FI’s mobile banking app and 20% have paid bills using a biller app (14% have used both).
- Of those who have made both FI and biller-direct payments, 69% prefer FI bill pay.
- The top reason cited by the 31% who use / prefer biller-direct payments is faster payment posting, and the ability to expedite payments topped the list of potential improvements to the FI bill pay experience, cited by 40% of FI bill pay users.
- Speed of payments is also a recurring theme among P2P users.
4. Further opportunity exists to extend mobile banking to enhance the payments experience.
- 14% of respondents have used card controls; another 10% would be very or extremely likely to use them.
- 21% of mobile bankers say they have made a tap & go payment; another 16% would be very or extremely likely to do so if it were offered directly by their FI.
- Although not the highest priority feature, 54% of mobile banking users say integration with their mobile banking app is very or extremely important in deciding to use tap & go payments.
Mobile banking complements, rather than replaces, existing physical and digital channels in many ways. But opportunities to enable payments transactions via mobile banking—with new use cases, new venues, and new payment characteristics and features—is giving mobile banking a role of its own.
About the Study
First Annapolis bifurcated its ongoing Study of Mobile Banking & Payments into The Mobile Wallet Report and The Mobile Banking Report beginning in Q1 2017. The Q2 Mobile Banking Report is the fifth in a series of studies tracking consumer adoption and use of mobile banking and payments. Findings are based on April 2017 survey results from 1,503 U.S. consumers age 18 and over who own a smart phone and have a checking account.
Topics covered include: banking relationships and product ownership; mobile banking, mobile bill pay, and mobile P2P; card controls; and tap-and-go payments/mobile wallet integration. Segmentation analysis explores variations by age and other demographics, FI size, and channel use.
For more information please contact Melissa Fox, Senior Manager, firstname.lastname@example.org; Emma Causey, Manager, email@example.com; Chris Razzano, Senior Analyst,
firstname.lastname@example.org; or Caleb Marley, Analyst, email@example.com.
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