Back in October of 2014, Apple Pay was launched in the U.S. with great fanfare, and for almost a year it was the only game in town for consumers who wanted to pay with their smartphones.
Since then it's been joined by Android Pay and Samsung Pay, with more branded mobile payment solutions, such as Walmart Pay and Chase Pay, waiting in the wings. But is anyone using them?
The answer, according to the latest Mobile Pay Tracker survey from Auriemma Consulting Group (ACG), is a qualified yes: about 7% of all U.S. smartphone owners* claim to have at least tried mobile payments. "It's important to remember that less than half the smartphones that U.S. consumers carry are capable of mobile payments," says Marianne Berry, managing director of ACG's Payment Insights practice. "Among those with an eligible phone, 27% of consumers we surveyed say that they have used Apple, Android, or Samsung Pay."
However, that doesn't mean they can leave their wallets at home yet. Mobile pay users in the still put the lion's share of their purchases on old-fashioned plastic, since stores that accept mobile payments are still hard to find in the U.S.: 39% say they would use mobile payments more if more stores/apps accepted it. 61% say their mobile pay usage is supplanting cash transactions, suggesting that the phones are being used for smaller purchases, confirmed by average ticket size -- one-third of those who have used mobile pay in the past week made a purchase of $25 or less. These transactions are made both in-app and in-store, except for Samsung Pay, which has yet to offer in-app payments. On average, users report that 17% of their discretionary spending was done with mobile pay.
Even when they find a store that accepts mobile pay, only one-third of U.S. mobile pay users (31%) pay that way every time they know it is accepted, most frequently citing that they simply forgot. "Reaching for the phone instead of the wallet isn't an automatic reflex, even for mobile pay enthusiasts," said Berry. "And even if they do remember, many will give up and use their plastic cards if they encounter friction at the point of sale, particularly if there are other shoppers in line behind them."
Mobile payments have been around for only a year in the U.S., a fraction of the many decades that plastic cards have dominated. As the upgrade cycle puts the newest smartphones into the hands of more consumers, increasing numbers of them will have the opportunity to try out this new way of paying. "Overall satisfaction with mobile payments is quite high at 80%, despite complaints about low merchant penetration and inconsistent customer experience at point of sale," Berry stated. "But mobile payment has yet to reach the tipping point that will take it from novelty to norm."