Analysts

Federal Reserve Board Survey Shows Growth in Mobile Banking and Payments

FedReportAmericans are increasingly using their mobile phones to access bank accounts, credit cards, and other financial accounts, according to the Federal Reserve Board’s latest report on mobile financial services.

As of November 2012, 28 percent of all mobile phone users and 48 percent of smartphone users had used mobile banking in the past 12 months. This represents a significant increase from 21 percent in December 2011 for mobile phone users and 42 percent for smartphone users. While relatively less common, the use of mobile phones to make payments at the point of sale increased threefold over the same period, as 6 percent of smartphone owners reported using their phone to make a purchase.

Mobile devices have increasingly become tools that consumers use for banking, payments, budgeting, and shopping. The Board’s report examines how consumers access their bank’s services using mobile phones (mobile banking), how they pay for goods and services with mobile phones (mobile payments), and how they use mobile phones to inform shopping decisions.

Mobile remote deposit capture doubles

The most common mobile banking activities continue to be reviewing account balances, monitoring recent transactions, or transferring money between accounts. Notably, the use of mobile phones to deposit checks has doubled between surveys, with 21 percent of mobile banking users having deposited a check with their phone in the 12 months prior to November 2012.

Mobile facilitates shopping decisions

Mobile phones are also increasingly used to help make decisions while shopping. Among smartphone owners, 42 percent had used their phone to compare prices while shopping and 44 percent had used their phones to browse product reviews in store. Almost two-thirds of those who had used their phone to do price comparisons changed where they made their purchase based on that information.

Mobile banking prevalent among underbanked Read More »

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May 6, 2013 | Analysts, mobile banking, mobile payments and Research | 0 Comments

Mobile Money Industry Insights – May 3, 2013

News and insights from this week in the Mobile Money industry, by Monitise Director of Market Intelligence, Andrew Griffin.

Andrew Griffin, Monitise Director of Market Intelligence

Andrew Griffin, Monitise Director of Market Intelligence

STOCK MARKET

It’s results season and I’m calling out two items this week:  AT&T Q1 saw interesting data points on their smartphone penetration: smartphones represent 88% of cell phone sales and 70% of their installed base; this is higher than the national average, which only recently rose above 50%.

Starbucks FQ2: According to Starbucks, their mobile app is responsible for 10% of US payments – impressive – and processing a $3 billion transaction run-rate, “a scale that rivals many premier U.S. banks”. Let’s examine this a little further. On their conference call, Starbucks’ management cites over 10 million global active mobile-app users and nearly 4 million US transactions per week. This data equates to 1 transaction every 2¼ weeks per active user, assuming most of them are in the US. More likely, it’s about 5 transactions per week for 800,000 or so of the users, and almost none for the rest who simply have balances left on their cards.  Those 800,000 must be buying an awful lot of coffee to make up 10% of total US payments. Put another way, despite half of their customers owning smartphones, only a low single digit percentage of customers actually use the mobile app.  Starbucks is rightly praised for its app, but as a single-use app it seems that most consumers aren’t seeing the benefit over a card (30% of payment is via prepaid). We think this has bright implications for mobile wallets, which we believe will enjoy strong adoption and usage.

TECH/MOBILE COMMERCE

How banks can compete in mobile shopping is explained in an interesting Bank Systems and Technology article  on how banks are well-positioned in mobile commerce. The article draws on Alix Partners opinion on the ability of banks to use their data to offer mobile commerce in a way that improves customer loyalty. It all starts with a high engagement mobile banking app, and is supported by survey data that consistently shows “my bank” is the most trusted mobile wallet channel.

Switching to the UK, a Deloitte UK media consumer survey is a rich mine of UK demographic stats and penetration rates. “TV is no longer a top 3 favored device, but TV programs remain the favored media for content.”

MOBILE BANKING/PAYMENTS Read More »

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May 3, 2013 | Analysts, Industry, mobile banking, mobile commerce, Mobile Money, mobile payments and Opinion | 0 Comments

Mobile Money Industry Insights – April 10, 2013

News and insights from this week in the Mobile Money industry, by Monitise Director of Market Intelligence, Andrew Griffin.

Andrew Griffin, Monitise Director of Market Intelligence

Andrew Griffin, Monitise Director of Market Intelligence

STOCK MARKET

eBay (PayPal) Analyst Day took place on March 28th and should be of interest to all mobile payments followers. The stock rose 7% on a better-than-expected 3-year growth outlook. For PayPal, eBay expects 2015 revenue of $10 billion and TPV (total payment volume) of $290 billion; that’s a 21% revenue CAGR (compound annual growth rate) and 26% TPV CAGR, though they called out mobile TPV CAGR at 65%.  They assume a slight reduction in take rate, but also in fraud. Management is positioning eBay and PayPal as the online partner for traditional retailers. 10% of PayPal TPV is now from mobile (i.e., $14 billion in 2012). Their 336 page slide deck can be downloaded here; eBay mobile app slides start on page 166, PayPal on page 233.

TECHNOLOGY

iPhone and NFC: The blogs are beginning to stir on Apple’s 2013 product refresh with an iPhone 5S/6 expected in the summer, and a complete refresh of the iOS look and feel, driven no doubt by all those live icons you now see on Android. This also means that it is the season for NFC speculation, now far damper than it was ahead of the iPhone5 launch that caused so many red faces when it didn’t appear. The general view again is that iPhone will have NFC this time, but most smart Monitisers think that though it may be there, it won’t be for payments!

While iPhone market share in the US has been overtaken by Android, Business Insider reports that Android market share in the US hit a peak of 54% in late 2012 but has now slightly declined, while iOS has gained from 35% to 39% in the same time frame. Blackberry has fallen to around 6% while Windows has been stable at 4%. iOS’ steady rise in the last year is attributed to it being more widely available on different operators.

MOBILE BANKING & PAYMENTS

Bitcoin: If you are reading this, then digital money must be of interest and Bitcoin is at the center of digital money attention this week, even if it has yet to become a mobile money phenomenon. It has seen a strong rise in value this month, rising from $50 to almost $2,000 per Bitcoin before falling back (at time of writing); it has also seen some very volatile intra-day trading, partly caused by DDoS attacks on some Bitcoin wallet providers (one, Instawallet, had to shut down). Read More »

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April 10, 2013 | Analysts, mobile banking, Mobile Money, mobile payments and Opinion | 0 Comments

Mobile Money Industry Insights

A round-up of news and insights from the Mobile Money industry, by Monitise Director of Market Intelligence, Andrew Griffin.

griff2Mobile Network Operator Subsidy Policy Changing?

T-Mobile has about a 10% US subscriber share and is taking the bold move of scrapping smartphone subsidies. I’m curious if a unilateral move can work. In Japan, where it was mandated by the government, subsidies weren’t exactly scrapped, but MNO’s (mobile network operators) had to separately bill the call charges and the phone hire-purchase agreement. Phone sales tanked (which was bad for handset companies), but so did churn. In Spain last year, 3 of the MNOs jointly stopped subsidizing, led by Telefonica, and soon the 4th operator joined them. After a few bumps along the road, it seems to have stuck. The result is much stronger MNO cash flow, despite a 10% fall in market revenues, and also lower churn and associated marketing costs, according to Telefonica. US ARPU (average revenue per user) is $52 per month, compared to the UK $27 and Germany $18. Why is the US so high? Partly because US MNO’s subsidize handsets far more (prepaid is much more common in Europe); additionally, US consumers talk and surf more, and with an average 60 million subs per operator (4 million in Europe), there is less competition and therefore higher prices.

Google Wallet De-emphasizing Proximity Payments

Karen Webster of PYMNTS.COM  thinks the recent Google Commerce division re-organization, putting Google Wallet into Google’s advertising business (95% of profit) means Google is retreating from its “payments offering to retailers” strategy and heading more towards an iTunes-like strategy for Google Play and for Android users to more easily buy online. Quite a big turnaround. She also provides a handy history of the Google-checkout to Google Wallet story. We still see that most newcomers to the Monitise story think mobile payments is the treasure at the end of the mobile money rainbow, when in fact it is mobile banking (creating high traffic) and mobile commerce (built on the high traffic pillar) that are of much more interest. Google clearly agrees, as it appears does Weve, the UK equivalent of ISIS which is very much pushing its mCommerce potential.

A Slew of mBanking Metrics

Americans are increasingly using their phones to avoid a trip to the bank, but they still have little interest in having mobile devices replace their wallets. Cell phone users tapping into banking services increased 33% during 2012, according to a Federal Reserve survey. Nearly half of those with smartphones accessed a banking app or mobile website in the past year, the survey of 2,600 consumers found. Read More »

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April 3, 2013 | Analysts, Industry, Mobile Money, mobile payments and Opinion | 0 Comments

What You Need To Know To Win The Mobile Wallet War

mobile_walletMobile wallets will be the next battleground among businesses from various sectors – including financial institutions (FIs), mobile operators, Internet companies and retailers – in the fight for ownership of the consumer relationship. 2012 witnessed the introduction of myriad mobile wallet trials, and the mobile wallet wars will only continue to grow in 2013 and beyond.

For FIs, this is driving the emergence of a new mobile wallet paradigm, with the mobile account management application becoming a unique and powerful vehicle that allows FIs to defend their existing business and extend to new markets while strengthening their customer relationships and creating new revenue opportunities.

To win the battle for the mobile consumer, FIs must leverage the key assets at their disposal in order to gain and maintain top of wallet status by driving deep customer engagement.

Click here to download two eye-opening white papers: “Six Elements of a Successful FI-Driven Mobile Wallet Strategy” and “Why the Digital Wallet Wars Matter.”

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March 25, 2013 | Analysts, mobile commerce, Mobile Money, mobile payments, mobile wallet, Opinion and Payments | 0 Comments

What are the Benefits of In-Store Mobile Commerce?

People often think of mobile’s role in commerce as simply allowing the consumer to do research in the store and make their purchases elsewhere, the dreaded “showrooming”. Increasingly, though, shoppers are using their smartphones to actually purchase items, replacing their credit cards and wallets entirely.

In the infographic below, Merchant Warehouse examines the benefits of mobile commerce for consumers—and why businesses would be wise to pay attention.

Benefits_mCommerce

View the full infographic.

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March 22, 2013 | Analysts, mobile commerce and Research | 0 Comments

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