High Level View of U.S. Mobile Payment Adoption

Oct 26, 2015 — Allan Pulga
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This morning, Market Platform Dynamics CEO Karen Webster posted an insightful article on Pymnts.com about the state of mobile payments in the U.S. market. She led with this month's EMV shift to chip cards, which is ushering a wave of new payment terminals in stores across the country -- many of which will enable greater acceptance of mobile payments on the merchant end.

She also addressed the "big friction" with chip card technology: Transactions take too long. NFC tap-to-pay can solve that, she says.

Chip card transactions take too long. NFC tap-to-pay is faster.

But even faster than NFC, she notes, is mobile order ahead technology. "It has the advantage that it can work with every single one of the 188.6 million (soon to be 200 million) smartphones owned by adults in the U.S."

Webster lists the following companies as leaders in the mobile order ahead space: Starbucks, Chipotle (theirs is called "Order On The Go"), and Burger King.

She also mentions growth in the buy online, pick up in-store space -- pointing out that 64% of online shoppers used the option in the 2014 holiday season, up 4 percent from the previous year.

Apple Pay is currently only used by 13 out of every 1,000 people in the U.S.

Going one further, she identifies delivery services like Amazon Fresh that allow users to not only skip the line, but "skip the store completely."

Lastly, Webster comes back to NFC smartphone technology and more specifically, to Apple Pay. According to a recent InfoScout survey, 16% of iPhone 6/6s users tried Apple Pay in October, up from 13% in June. What's more telling, however, is the fraction of all shoppers who use Apple Pay (calculated by extrapolating numbers from a combination of surveys): 1.3% or 13 out of every 1,000 people.

NFC isn't the only mobile payment, so is payment via mobile apps (i.e. mobile order ahead).

This number is sure to go up -- with increased merchant adoption of EMV/NFC-enabled payment terminals -- but Webster insists physical payment isn't the only mobile payment; payment via mobile apps (i.e. mobile order ahead) is independent of hardware constraints and "takes (consumers) wherever commerce takes them -- cars, appliances, clothing, you name it."

Topics: Retail Operations, Wireless Trends, Customer Experience

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