Survey: Discounts and coupons will drive adoption of mobile payments

A survey of 1,036 US adult consumers, conducted by StrategyOne on behalf of Verifone, has found that almost twice as many are interested in using mobile payments if the service also includes a way to get discounts and coupons on their phones.


The survey found that:

  • Nearly three in five adults in the US (57%) think mobile payments will become widespread over the next three years.
  • More than one in five consumers (22%) said they are interested in using mobile devices to pay for goods and services.
  • Just 2% of those surveyed say they already use their mobile phone to pay for goods and services.
  • 31% of consumers would like to be able to take advantage of store-specific loyalty programs using just their phone.
  • 68% of adults surveyed agreed that credit and debit cards will always be a dominant form of payments for goods and services, regardless of new payment options.
  • More than three in five adults (63%) think their personal information is more vulnerable when using a mobile phone for purchasing goods and services compared to debit or credit cards.
  • Two in five adults (41%) said they would be driven to use mobile payment technologies if they could apply discounts and coupons from their mobile devices.
  • Nearly half the group (47%) said that a bigger adoption driver would be knowing that all their personal and financial information is completely secure.
  • 39% of adults would feel confident their personal information is secure when using mobile payments if a regulatory organisation certifies the transaction is secure.
  • Adults with higher household income ($75,000 or more) and college degrees are more likely to be persuaded to use mobile payment technologies by confidence in information security, coupon and discount offers and store-specific loyalty applications.
  • Younger adults are more likely to use mobile devices for payments. Already 8% of the 25-34 age group use mobile phones as payment devices — the largest of any group.

“There’s a clear consumer interest in mobile payments as well as well as a desire to connect with retailers and brands in personalised ways,” says Verifone’s Dave Talach. “Providing additional benefits and gaining consumer trust through security in the retail experience will be key.”

“Security is the ingredient required for success,” he adds. “It’s not a nice-to-have flavour but a tenet that must be baked in to protect consumer transactions and trust in retailers.”

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4 comments on this article

  1. 2 Questions:
    First, who gains the most from the adoption of NFC – the terminal makers.
    Second, did they ask how much consumers were willing to pay for this new service – I doubt it. Merchants won’t pay for it banks won’t pay for it… will consumers?

  2. @ MIchael – It’s going to have to be the merchants. Also, a possible benefit for merchants is motivating consumers to use a particular card in their wallet via NFC to pay for purchases – e.g. give a customer a discount to use a debit instead of a credit card. This could help recoup some costs.

    The only real cost is the terminal itself. That said, I still think the future of mobile payments is on-phone payments (like we are doing at TotalTab), not NFC, which still requires the use of (yawn) a cash register.

    1. TotalTab – 20 years ago, when the banking community rolled out online debit cards we convinced the merchants to make the changes with one argument and one promise.

      The argument was that we surveyed consumers and were able to convince merchants that the average ticket for a debit card was higher than a cash transaction. Merchants would sell more if they took the card. Higher sales, higher profits.

      The promise was simple. The five california banks (First Interstate, Wells, BofA, Security Pacific, and Crocker) promised that the merchants would only need one system to accept 95%+ of all debit cards.

      The mobile payment community cannot make either claim. In addition, US cards will use CSD systems and the rest of the world uses EMV cards. These systems are not compatible. So, if the US-based mobile payments companies get their act together, they still cannot promise merchants a one terminal fits all.

      One final thing… Merchants don’t care which card a consumer uses at the point of sale. As long as it’s approved FAST, they’re fine. Your website does not describe your system. If I were you, I would be testing the check out times (from the merchant’s point of view) of your system versus cards. That, more than anything else will determine your success. PM me if you want to know more.

      1. Thanks for the response Michael!

        Yeah, I agree fragmentation could be a huge issue going forward. A dozen payment systems (another format war) could be an issue. On the plus side (although some could count as a negative) the end charge / transaction still happens on your card, even though it’s not technically present.

        What we are doign is specific to restaurants / bars, a pay-via-phone solution that doesn’t require a server to run a card. We create a system that allows your phone to communicate directly to the POS system from anywhere – so you can view, pay and close a tab from your phone. we are still developing it and will be in Beta in Boston this summer. Our solution basically frees up servers from having to run cards and prevents restaurant visitors from having to wait for someone to run it.

        So it’s a slightly different ball game – I think the retail fragmentation is a real potential issue. I read a short book (very short… maybe white paper is a better name for it) recently on mobile payments, and the author suggested that merchants do care which card they use since fees for the merchant vary – I think he coined it “tender steering”. I’m not 100% sure how feasible that is or isn’t but it was an interesting concept I hadn’t thought of prior to reading the book.

        I’ll send you an email, I’d love to talk more! I take advice and insight from anyone all day long!

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