Take On Payments, a blog sponsored by the Retail Payments Risk Forum of the Federal Reserve Bank of Atlanta, is intended to foster dialogue on emerging risks in retail payment systems and enhance collaborative efforts to improve risk detection and mitigation. We encourage your active participation in Take on Payments and look forward to collaborating with you.
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May 2, 2016
Mobile Financial Services Are Still Growing
The Federal Reserve Board's Division of Consumer and Community Affairs (DCCA) recently released its Consumers and Mobile Financial Services 2016 report. This annual research effort began in 2011 to measure the adoption and usage of mobile banking and payment activities by consumers and the use of mobile technology in making financial decisions. The latest survey was fielded in November 2015 with a respondent base of 2,510 adults age 18 and over, of which 1,064 had participated in both the 2013 and 2014 surveys.
Key adoption and usage findings from the survey include:
- The major barriers to mobile payment adoption remain the same as in previous studies—satisfaction with current methods of payment and concerns about security.
- Convenience is the most common reason given by the respondents for adopting mobile banking.
- Perhaps reflecting a positive effect of mobile phone security education, 70 percent of smartphone users indicated they password-protect their phone and 78 percent indicated they download applications only from their primary application store.
- Mobile phone penetration has remained consistent over the last three years at 87 percent of the U.S. population, although smartphones now account for 77 percent of mobile phones versus 61 percent in 2013.
- Ownership of smartphones is higher for Hispanics than for non-Hispanic whites in this survey.
- Usage of mobile banking services by those with mobile phones increased to 43 percent from 33 percent in 2013. Smartphone owners showed a higher usage rate of mobile banking, at 53 percent, but this rate was essentially flat from 2014.
- While usage of mobile banking has generally increased every year for each age group, younger consumers have consistently been the most likely users while the older segment has been the least likely, as the table shows:
- The most common mobile banking activity is checking an account balance or making a specific transaction, followed by transferring money between accounts and receiving an account alert.
- Despite the strong usage of mobile banking, more than 80 percent of smartphone owners with a bank account visited a branch or used an ATM over the last 12 months, while only 29 percent called their banks.
- Mobile payment activity still lags mobile banking activity. Only 24 percent of mobile phone owners had made a mobile payment over the last 12 months, compared to 43 percent of mobile phone owners with a bank account who used mobile banking. The study found that there is no clear relationship between mobile payment usage and income or education level. As in previous surveys, minorities make mobile payments at a higher rate than white, non-Hispanic consumers.
Additional findings from the survey as to security and privacy and the use of the phone in making financial decisions will be highlighted in future blogs. This survey provides valuable data in the ongoing evolution and adoption of mobile banking services and I hope you will read it in detail.
By David Lott, a payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed
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