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Mobile payment expected to rise this year

Devices now 'seamlessly integrated' into our daily lives, Catalyst Canada study concludes

Catalyst Canada’s third annual study of smartphone adoption and behaviour predicts a surge in mobile payments for 2016, while noting that wearable devices such as the Apple Watch have been a “surprising laggard.”

The study of 1,000 Canadians aged 18+ found that 76% of Canadians now own a smartphone, up from 55% in 2014. The device has been “seamlessly integrated” into our daily lives, the study noted, and is now used for everything from buying a cup of coffee to tracking our health and paying our bills.

Mobile payments set to rise…

The study found that 33% of smartphone owners expect to make a mobile payment of some type this year, up from one quarter of respondents in 2015. The responses indicate “an increasing level of comfort” with this type of payment, the study concluded.

Security concerns were the most often-cited drawback for people who have never made a mobile payment, with people over the age of 35 being the most concerned and millennials the least concerned.

Security concerns in general rose between 2014 and 2016, particularly among two groups: Women and people over the age of 35. The second biggest drawback in mobile payment adoption, the study found, was users not knowing how to make a payment this way.

…and Starbucks is among the category leaders

While Paypal leads the way in mobile payments, Starbucks is one of the few retail apps flourishing in the space, with 40% of respondents indicating that they have installed the coffee company’s app on their phone and use it regularly.

“Starbucks is an example of a company that has put together a good mobile experience with enough value and utility,” said Catalyst Canada CEO Jeff Lancaster. “It has become one of the core apps that Canadian consumers feel comfortable using on a regular basis.”

Starbucks said last year that mobile accounted for 21% of its transactions (US$1.03 billion) in the fourth quarter, with the company amassing approximately five million mobile transactions each week. Last month, the company announced plans to launch the app in India this year.

Catalyst concluded that an assessment of Starbucks’ methods could prove beneficial for companies looking to engender customer trust in their own mobile payment process.

App hoarding declines…but health apps grow in popularity

The number of apps installed on the average smartphone has fallen from 27 to 18 this year, with consumers increasingly quick to uninstall apps. Lack of use was the most commonly given reason for uninstalling an app, followed by storage space limitations.

Health is one of the app categories to remain, well, healthy, with 30% of respondents indicating that they had two or more health apps installed on their smartphone (up from 25% in 2015), and 7% indicating that they had three health apps or more.

Millennials were more likely than people over the age of 35 to have a health app installed.

Banking apps on the rise

The Catalyst study found that banking is one of the key smartphone activities for Canadians, noting that the continued development of client apps that trump the browser experience is paving the way for increased app-based banking activity.

The study found that 86% of people who used their smartphone to pay bills did so through apps (up from 65% in 2014), while 84% of users checked their accounts on their phones (versus 61% in 2014).

The study also noted that an important mobile banking threshold was crossed this year, with more than half of respondents indicating that they used their smartphone as the primary vehicle for depositing a cheque.

Catalyst noted that the prevalence of mobile cheque depositing was so limited that it didn’t even collect data on this behaviour in previous years, an indication of just how quickly Canadians have adopted this function.

Voice control services gaining in popularity…

While Apple’s nearly five-year-old voice control service Siri has maintained its novelty factor, the Catalyst study suggests it has evolved into a key function for smartphone users, with nearly one third of respondents – and nearly half of millennials (44%) – indicating that they use it at least occasionally.

The most common uses of voice control services are searching the internet, sending texts and making phone calls. Nearly half of Google Now users, for example, use the service to conduct web searches.

“As opposed to wearables, which had big hype and big promise, but nothing has really come out of it, voice search has been a steady grinder, with usage continuing to grow – especially as we’ve had more and more digital assistants come on line,” said Lancaster.

He said that the use of these services could have potentially significant implications for marketers, informing everything from their content strategy to search optimization efforts.

“If people are asking certain questions, or asking them in certain ways, I can make sure that content is more optimized for search so that when these digital assistants are answering these questions, I have the answers,” he said.

…wearables, not so much

Catalyst found that only 10% of respondents own an Apple Watch, although ownership has doubled in the past year, suggesting that ownership is growing quickly.

In a study last year, eMarketer said that that 81.7 million Americans would use a wearable device such as an Apple Watch or FitBit by 2018, but the Catalyst study cautioned marketers to be wary of the “wearables hype.”

“App development and optimization for this market should be carefully considered before pursuing, as adoption is still relatively low,” the study concluded.

Make it quick

Slow load times for web pages were once again singled out as one of the biggest frustrations for smartphone users, which the study said underscores the need for companies to optimize sites and content for a mobile audience.

“If your site’s not serving up the content to answer the question a consumer’s asking, they’re going to go somewhere else within milliseconds,” said Lancaster. “Companies need to make sure they’re optimizing their site and their content for instant answers, because people expect them.”

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