To say nobody cares about mobile payments is a bit of an exaggeration, but the numbers are pretty dismal compared to what analysts expected as we kicked off 2015. The Federal Reserve's Consumers and Mobile Services Financial Report for 2015 suggests that only about 4% of consumers actually use mobile payments today, and that only 13% of consumers have actually attempted a mobile payment.
Further, a recent report from USA Today indicates that while the market is growing, the growth has been surprisingly slow. The article sites a survey that found only 20% of those that can use Apple Pay, for example, have used it. Of the1,000 consumers who owned Apple Pay-compatible iPhones in the survey, nearly 80% had not used Apple Pay even once, and of the 20% who had, most (56%) only used it about once a week.
What do these numbers mean for your credit union?
Quite frankly, these numbers should mean very little to your credit union. Even though mobile wallets are not growing as quickly as expected, where they are seeing higher adoption rates are in what most credit unions view as a key demographic: Millennials. As we reported last week in our article "What's Beyond Mobile Payments for 2016," 86% of millennials made purchases or conducted transactions from their smartphones.
What's more is that they want to use their mobile phones as much as possible. Just take a look at any group of millennials in practically any setting and see how they are glued to their phones. When asked what they’d like to do in the future, 19% said pass funds among friends by taking pictures of their debit cards, and 21% said they’d like to establish a budget by taking pictures of their paychecks, bills and bank statements. Essentially, getting rid of the need to carry a wallet.
As it stands right now, mobile payment products are good, but they are not great. It is not significantly more convenient or feature rich to use your mobile phone as it is to use a credit card. The "cool factor" only gets you so far. If you have to carry your credit card anyway, mainly due to some places not accepting your form of mobile payment technology, then what is the push for faster adoption?
As is the case with technology, however, there is only room for improvement. And with names such as Apple, Android and Google in the mobile payment marketplace, you can be sure that advances will occur to continue to attract people to mobile wallets. According to the latest mobile payments forecast, the total value of mobile payment transactions in the U.S. will grow 210% in 2016, and total mobile payment sales will rise faster than average spending per user in 2016. It only stands to reason then that credit unions need to stay on top of this technology and need to be running a core system that allows for new opportunities for product growth.