Forecasting Consumer Preference in Mobile Payments
By: POSGuys - 11/20/2015

Mobile payments have gained significant market share and continue to be of large importance for retailers and sellers everywhere. But how important are mobile payments? What do consumers really want when it comes time to pay? We attempt to address these questions below.

**Reviewing consumer preferences in the mobile payment space**
 
The following dataset was collected by Accenture in 2014 and speaks to consumer preferences within their mobile shopping experience.

*Which of the following services would you use in your shopping experience if offered through a mobile device while in-store?*

<a href = "https://posguys.blob.core.windows.net/content/images/blog/33/graph1.PNG" target = "new">![What services would you use][1][500][] </a>
 
**Top 3 in "Using it now"**

1. Gather loyalty points or savings as you shop based on current
   promotions 
 2. View friends or similar customers' ratings and reviews
 3. Ability to easily review historical purchases or wishlist

**Top 3 in "Would definitely use and can't wait until they offer it"**

4. Automatically credit all retailer and third party coupons to my purchase
 5. Offer real-time promotions that you might be eligible for
 6. Scan items as you fill your shopping cart which keeps a tab of spending
 
**Top 3 in "Willing to try it"**

7. Shopping list and find items in the store
 8. Offer real-time promotions that you might be eligible for
 9. Ability to scan an item to see it in different colors not available in the store

**Top 3 in "Would never use"**
 
 10. Pay with your phone at the checkout
 11. Chat with experts or access product information when scanning barcode
 12. Stop you from buying wrong items based upon purchase history or profile
  
**What can we take from this data?**
 
It seems as if consumer preferences are centered not necessarily around "user experience" but rather direct wallet savings. This can be surprising, depending on your viewpoint, since user experience and convenience tends to be the focus in the rise of mobile payments. For instance, the highest result in the "Would never use" category is "Pay with your phone at the checkout."
 
Now, this can be taken one of two ways:

13. People are more adverse to paying with their phones than most mobile payment providers would have you believe.

14. This is a repeat of the initial backlash against eCommerce and paying online, and will subside eventually.

The second is a strong possibility, and would relieve concern for mobile payments that everything just takes a little time.

**The loyalty program continues its reign**
 
It's a legacy strategy that continues to bring customer retention to retailers of all kinds. In the Accenture data, it's the highest used and comes in at second-to-last under "Would never use." Most likely due to its long-standing nature and high adoption across the board, loyalty programs still remain most popular for consumer payments.
 
 
**Speaking of loyalty programs…**
 
Take a look at this data from Cowen Group (February 2015) overviewing the usage of different apps for mobile payments.
 
<a href = "https://posguys.blob.core.windows.net/content/images/blog/33/graph2.PNG" target = "new">![Loyalty Programs][2][500][]</a>
 
It can be discerned that while the major players still maintain market share (PayPal, Google Wallet), store-specific apps have taken their fair share as well (McDonald's, Starbucks). This is an interesting development, and could provide even deeper loyalty program opportunities  for retailers.
 
**Cash is still king for many consumers**
 
What you don't see in the data above is information outside of the mobile payment options. In fact, cash still accounts for 40% of consumer transactions (according to a report from the Federal Reserve System's Cash Product Office in April 2014). That's twice as much as credit cards (which comes in at 17%, and is supposedly the biggest competitor to mobile payments). It speaks to the importance of maintaining cash drawers in the retail environment.
 
**So, where do we stand?**
 
It is obviously early for mobile payment providers, and they seem to have caught on with a segment of the market but haven't yet gained critical mass. It's important for retailers to review all preferences of their customers to provide the best experience.
 
With time, it looks as if mobile payments may have the opportunity to be the major player, but it's not yet a foregone conclusion. We will continue to review new data as it comes in to interpret market movements.

[1]: https://posguys.blob.core.windows.net/content/images/blog/33/graph1.PNG
  [2]: https://posguys.blob.core.windows.net/content/images/blog/33/graph2.PNG

Forecasting Consumer Preference in Mobile Payments By: POSGuys - 11/20/2015

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Forecasting Consumer Preference in Mobile Payments
By: POSGuys - 11/20/2015