Mobile payment awareness on the rise, but not usage

Study shows regular use of mobile payments in Canada remains flat at 11%

While Canadians’ awareness of mobile payments is on the rise, cash and plastic are still king, according to a new survey by Accenture.

The 2016 North America Consumer Digital Payments Survey, based on responses from 3,400 smartphone users in the U.S. and 600 in Canada, found awareness of mobile phone payments in Canada increased from 40% to 49% over the last year. However, regular use of mobile payments remained flat at 11%.

Sixty-three percent of Canadian respondents said they used cash at least weekly to make purchases at a retail location, down from 68% in 2015. The survey found even with the decline in cash use, cash and plastic were still the most commonly used payment methods. Canadian consumers’ use of debit and credit cards for payments dropped one percentage point each to 57% in 2016.

“The existing payments system isn’t broken, which is why consumers are not making a mass move to mobile phone payments adoption – the incentives are not there yet,” said Jonathan Magder, Canadian payments lead at Accenture, in a release. “Canadian consumers expect more in today’s fast-paced digital environment; just the ability to tap-and-pay is not enough. Payments providers need to bring the traditional card to life and create a real-time interactive experience for consumers.”

The survey identified three key barriers to consumer adoption of mobile payments. Of the nearly two-thirds (64%) of North American consumers who have never used their mobile phone for in-store payments:

  • 37% said they have not done so because they believe cash and plastic are fine for their payments needs

  • 21% prefer not to register payments credentials into their mobile phone

  • 19% are concerned unauthorized transactions may happen

Nearly three-quarters 71% of Canadians surveyed said they trusted traditional card providers the most as their mobile payments provider, followed by alternative payments providers such as PayPal (62%), established retail banks (58%) and large tech companies (54%).

Millennials and ‘mass affluents’

Millennials and “mass affluent” individuals (those earning $100,000 annually after taxes) are natural target audiences for payment providers, as they’re early adopters for the next wave of payments technology, according to Accenture.

About half of both groups in Canada (47% for mass affluent and 48% of millennials) considered themselves to be among the first to try new technologies. About one-fifth of millennials (19%) and mass affluents (22%) are extremely interested in making payments via wearables or smart devices.

While millennial and mass affluent consumers are leading the adoption charge, consumers overall are becoming more open to considering digital payments options. One-fifth of North American consumers are interested in using wearables (21%) or smart devices (20%) to make payments, a two- and three-percentage point increase, respectively, from 2015. North American consumers expressed the most interest in the ability to have their car automatically pay for parking (30%).

“Millennials and higher income individuals may be low-hanging fruit for payments providers looking to increase adoption, but there is also a vast amount of untapped opportunity with consumers who are becoming more familiar with digital technologies and the rewards and convenience it affords,” said Madger.

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