Awareness of mobile payments is on the rise, but only 10% of Canadians use their smartphones to make payments at least weekly, according to a new Accenture survey, conducted by Lightspeed Research.
The 2015 North America Consumer Digital Payments Survey, a survey of 4,000 smartphone users in Canada and the U.S., found 40% of Canadians know they can use their phones as a payment, up from 35% last year.
“[The banks] haven’t really seen the traction they’re looking for simply because everyone is focused on just the payments transaction itself,” said Jonathan Magder, Canadian payments lead at Accenture. And with so many other convenient payment options available, such as tap and pay, “there really isn’t the drive to get consumers to want to pay any other way right now.”
To increase adoption rates, banks and retailers “need to go beyond payments,” said Magder. “You need to look at the pre-purchase side, so things like coupons and offers to steer customers into a specific store or get them to spend more in that store. And then post-purchase, which are things like e-receipts, customer satisfaction surveys, and even loyalty to an extent as well.”
In the survey, 79% of Canadian consumers who currently make mobile payments said they would increase their usage if they were offered discounts or coupons based on past buying behaviour, and 73% would increase their usage if they received reward points.
More than half of Canadians currently not making mobile payments would make them if they were offered discounts or coupons (53%) or reward points (53%).
The survey identified two groups driving mobile payments adoption: high-income consumers and millennials. Consumers with household income of at least $150,000 are the most avid adopters, with 38% using their phones to make payments at least weekly. Twenty-three percent of millennials reported using their phones to make mobile payments at least weekly.
“Everyone is always so focused on millennials, but the fact is digital adoption spans all age groups,” said Magder. “And I think the primary reasons why the high-income earners are the most avid users is because 1) they’ve got the phones and 2) they’ve got the disposable income to do so.”
Looking ahead, consumers expect to increase their use of various digital payments in 2020 compared to today.
There will be more regular users of PayPal (17% in 2020 versus 10% in 2015); mobile payment apps by retailers, restaurants or others (15% in 2020 versus 9% today); and digital currencies (10% in 2020 versus 6% in 2015).
In addition, 9% of Canadians expect they’ll be using Apple Pay/Samsung Pay in 2020 and 7% said they’ll use Google Wallet.
While cash is still king today, there will be fewer regular users in the future (68% in 2015 versus 54% in 2020). Debit cards and credit cards are expected to remain largely unchanged: 58% in 2015 and 57% in 2020 for both debit and credit cards.
And while the payments industry hasn’t scratched the surface in connected commerce, 16% of Canadians surveyed have used a wearable device to make a payment at least once. And 13% indicated they are interested in making a payment through a connected smart device, such as appliances and cars.