The number of consumers using a mobile device, including a smartphone and a tablet, to make payments has tripled in the last year, according to a new study from Visa.
Visa’s 2016 Digital Payments Study, which surveyed more than 36,000 online consumers in 19 European countries, shows how digital methods of payments are becoming the norm for customers.
At the time of the study, over half of European consumers (54%) use mobile devices to make payments regularly. To put it in perspective, when the same question was asked last year, only 18% said they pay on mobile frequently for everyday goods.
One year ago, 38% of the people surveyed said they had never used a mobile device to make payments and had no plans to do so. Today, that number has dropped to 12%.
Top 10 countries for mobile payments
According to the study, countries such as Turkey and Romania have been leapfrogging traditional payment methods to adopt new technologies faster. Developed markets, especially the Nordics are evolving to new technologies at differing paces. Visa says that three-quarters (74%) of Britain’s population are mobile payment users. (A mobile payment user is defined in the study as someone who uses their phone, tablet or wearable to manage their money or make a payment in person, online or in-app.)
More than half of these users use their device to transfer money to friends and family (59%) and just under half use it to buy take-away meals (45%).
What is very interesting is the gradual increase of security and comfort associated with mobile payments. More and more people are becoming comfortable using mobile payments to make high-value purchases.
In the UK, over two-fifths (43%) purchase high-value items such as holidays and electronics on a mobile device as well as regular transactions such as paying household bills (42%) and buying bus or train tickets (41%).
Mobile payments increasing across all age groups
Mobile payments are proving to be popular with more than just millennials as the study actually shows it’s becoming a hit across all age groups. For the first time, more than half of European respondents in all age brackets are using mobile banking. In fact, 55-64 year olds are seeing the highest growth rate at 33%, while millennials 18-34 have a growth rate of 24%.
In Britain, the growth rate among older users has increased by 18%. Just under half (46%) of 55-64 year olds currently use a mobile device for banking compared with four-out-of-ten respondents who accessed online banking through an app in 2015.
Kevin Jenkins, UK & Ireland Managing Director at Visa said:
This data is a confirmation that the future of digital payments has arrived, with consumers across the length and breadth of the UK and Europe embracing a variety of new ways to pay. Visa sees smartphones and wearables as the beginning of a broader trend, with millions of new connected devices making it simple, safe and secure to integrate daily commerce transactions into almost any technology.
The study also drew attention to the rise of contactless and suggests there is a strong correlation between mobile payments and contactless. The research indicates that, across all age groups, contactless payments are now the norm. In the UK, more than half the people surveyed (58%) used contactless cards this year, up from 20% in 2015.
“The uptake of contactless cards has made a significant impact on normalising digital payments in the minds of British consumers, regardless of age. The near-ubiquity of contactless card usage is gradually helping everyone engage with newer ways to pay, including mobile banking,” Jenkins continued.
Eastern Europe is still very much a region finding its identity following the breakdown of the Soviet Union over 20 years ago. Countries in the region are at various stages of economic growth and payments infrastructure development, and the e-commerce landscape looks different as you cross borders.
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A new report published by Earnix shows findings stating that most millennials will use a single portal to aggregate services from multiple banks with which they have existing customer relationships in the future. The report, The Role of Analytics in the New Banking Age 2017, also states that most banks believe predictive analytics and machine learning will become the most powerful way to win back customers over the next five years.
The Global Business and Spending Outlook looks positive for the B2B payments industry.