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Are the British more open to mobile wallets?

A few weeks ago I wrote about the results of the consumer research we carried out in the US when we asked consumers who they most trusted to issue mobile wallets. We also asked the same question in the UK and the results were a little more encouraging. Here only 42% said they would never use a wallet, meaning 58% would.

This 58% figure in favour is in contrast to the 64% of US consumers who say they would never use a mobile wallet.

Consumers were asked who they would trust most to issue a mobile wallet: banks, phone companies, Google or major retailers, with a final option of saying no-one because they would not use such a service. The most trusted issuers for UK consumers were banks at 34%, followed by Google at 14%, mobile operators at 6% and retailers such as Debenhams at 4%. In contrast US figures were banks at 20%, followed by Google at 10%, retailers such as Walmart at 3% and phone service providers at 2%. 

Both age and gender made a difference to results with British men being more willing to use a wallet – only 37% said they never would against 44% of British women. Younger people were more open to the idea than the older generation with the group most likely to use wallets being men of 18-14 at 73% whereas the group least likely to was women aged 55-64 at 31%. In contrast, 18-24 year old men in the US were one of the most conservative groups with 71% saying they would never use a mobile wallet. This possibly may reflect a lack of ease with financial services in that age group rather than technology though.

The group most likely to trust banks in the UK were the 35-44 year olds, whereas 18-24 year olds were the group most in favour of Google. The only demographic segment that favour retailers as issuers were women aged 25-34, but even for them retailers came second behind banks as the preferred issuer.

Scots were least likely to consider using a wallet whereas the English were most likely. As a Scot by adoption I’m backing rapidly away from that finding except to say that clearly conservatism in general has a lot to do with rates of new product uptake and while Scotland couldn’t be less Conservative, it is, especially outside the Central Belt, fairly conservative.

What could be the reason for the fairly striking headline difference with the US? Again, in many respects, the US is more conservative than the UK, especially with respect to financial services. Cheques are still widely used and while we have Faster Payments, it has recently emerged that US banks stopped a similar proposal being developed. With no commonly used Chip & PIN (yet), many may find no particular reason to stop using credit cards at the point of sale.

In addition, UK consumers are a lot more at home with mobile banking than those in the US. Recent figures from the Office of National Statistics show that over half of UK adults use mobile banking, whereas according to the Federal Reserve, the equivalent US figure is 21%. So it makes sense that there might be more hesitance about mobile payments too.

Pingit’s success may have paved the way in Britain too.

Overall though, our main conclusion about the US holds for the UK too. A key marketing challenge for any mobile wallet issuer is to come up with a narrative or metaphor that makes sense to the consumer. Then they need to identify the pain points for the consumer and use that as a way in. Personally, I think that rather than loyalty and couponing, that is online payments. Despite how much 3D Secure has improved in recent times, it's still easier to use PayPal. That ease is what wallets need to emulate.

Incidentally, we’ve had a number of comments on the lines that it was a shame that we didn’t include PayPal in the research as an option. All I can do is agree. Although our initial motivation was mainly to see how banks lined up against MNOs and retailers, it would have been very interesting to see how the results might have differed. In fact that’s given me an idea for some more research...

 

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Comments: (3)

A Finextra member
A Finextra member 15 November, 2013, 10:04Be the first to give this comment the thumbs up 0 likes

It would be nice to see some UK usage statistics on current Wallet Applications such as the Starbucks App (in terms of Active Installs; Loaded Balance; Purchase velocity rates etc).

HCE is more likely to appeal to Retailers than to Banks (due to its inherent lack of adequate Security) - we may see a plethora of NFC based mobile wallets in 2014 as a result.

Jane Adams
Jane Adams - Currently looking for a job - Edinburgh 18 November, 2013, 15:42Be the first to give this comment the thumbs up 0 likes

HCE's security depends on how it's implemented. Using tokenisation it isn't inherently insecure. That said, we agree that retailers are going to like it a lot.

A Finextra member
A Finextra member 24 September, 2014, 10:55Be the first to give this comment the thumbs up 0 likes

"HCE security isn't inherently insecure" - I am not sure if that is good or bad news..

With HCE your card is stored centrally and transferred to the phone when needed. Recent reports on app security shows that the majority of apps have security problems and that is my personal experience as well. Malware, repackaging, jailbreaks etc calls for more app security than we see in today's mobile payment apps. Its possible to secure HCE payments but tokenisation is not enough.