2016 U.K. M-Payment
and P2P Payment
Consumer Study
FI ND I N GS & INS IG HTS
Table of Contents
3
Introduction
Introductory infographics
Key Findings
FIndings & Insights
Segmenting the respondents by
digital capabilities: Rogers Diffusion
of Innovation
M-Payments: An encouraging m-payment scenario
6
7
10
11
12
In-app
16
In-store
19
P2P payments
25
Location-Based Service (LBS)
30
32
Conclusion
Implications for Payment Providers
33
35
Appendix
Methodology
36
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
2
Introduction
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
3
I NTRODUCTION
“As is the case in so many disruptive
events, the winner will be the consumer,
who will receive lower prices, more
innovative products and better service in
a transformed banking world.”
– Andres Wolberg-Stok, Global Head of Emerging
Platforms and Services at Citibank
®
The TSYS® second annual United Kingdom mobile
payment (m-payment) and peer-to-peer (P2P)
payment consumer study reveals consumers’
payment preferences and offers new insights on
topics such as mobile banking, P2P payments and
location-based services (LBS).
Aligned with our brand promise that “Payments
should revolve around people and not the other
way around ,” the goal of this consumer research
is to understand how consumer attitudes and
concerns influence how people use m-payments
and P2P payments. We also set out to monitor
the evolving landscape to identify consumers’
changing attitudes and behaviours.
℠
We focused on the following key questions:
• From an end-user perspective, what has
changed in mobile banking apps and
m-payments since last year?
• How well do consumers understand and use in-app payments, in-store m-payments and
P2P payments?
• What is the consumer attitude toward LBS?
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
4
I NTRODUCTION
The financial services industry is challenged by
legacy infrastructure, an erosion of public trust,
consumers’ difficulty accessing credit and the lack
of speed with new products offerings. All of these
factors have led to new entrants, creating a more
dynamic environment with financial technology
(fintech) start-ups with innovative services,
products and revenue models.
Until relatively recently,
fintech and banks were seen
as competitors. Today, there
exists a natural opportunity
for meaningful cooperation
and partnership.
Until relatively recently, fintech and banks were
seen as competitors. Today, there exists a natural
opportunity for meaningful cooperation and
partnership. By their very nature, fintech players
lack an established reputation for stability, loyalty
and knowledge of data security and financial
fraud, banking regulations and risk management
—which can mean new opportunities for a future
relationship with traditional banking partners.
The proliferation of fintech start-ups is a global
phenomenon: Nearly 66 percent of the world’s
consumers are using products/services from
fintech firms.1 And the number of these startups is growing exponentially. According to
Forbes magazine, in Asia, fintech firms number
approximately 2,500, whereas in the U.K. and the
U.S., they account for a combined total of 4,000.2
Furthermore, the investments made within the
fintech environment have grown by a CAGR of 65
percent between 2010 and 2015.3
While emerging payments and fintech products
like m-payments and P2P payments have
reached only the very minimum stages of
maturity, they do, however, allow for meaningful
consumer insights to be captured. In the U.K.,
m-payments are gaining traction with consumers.
In terms of m-commerce value, eMarketer®
predicts a CAGR of 17 percent between 2016 and
2019, reaching £38 billion in 2019.4 Both TSYS and
MasterCard®5 consumer research indicate British
consumers are likely to pay for a significant part
of their in-store payments via their smartphone
in the coming years. The in-market presence of
both AndroidPay® and Apple Pay® will continue to
catalyse significant adoption of m-payments in
the near future.
The value and volume from some of the U.K. P2P
players are encouraging. Paym, a P2P payment
provider, enjoyed a 2015 year-to-year increase of
362 percent in transaction volume.6 TransferWise®,
a U.K.-based P2P money transfer service, reports
that its users now move over £500 million a month
on its platform. These are encouraging indicators
showing the growing traction of P2P payments
among consumers.
Despite the positive data coming from the
payment ecosystem, m-payments and P2P
payment markets are still in their early stages.
However, there’s a strong need to monitor
consumers' attitudes and behaviours — a key step
to developing customer-centric strategies that will
address concerns related to security and create a
seamless payment experience.
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
5
I NTRODUCTION
Fintech are entering the banking and payment scene in a big way, driven by a wave of innovative services, products and revenue models.
However, that also means there’s no established reputation for stability, loyalty and knowledge on data security, financial fraud, banking
regulations and risk management — all of which can open new opportunities for a future relationship with traditional banking partners. In the
past, fintech and banks were seen as competitors. Today, there exists a natural opportunity for meaningful cooperation and partnership.
Numbers of Fintech
Start-ups Worldwide
U. K .
Worldwide Fintech Investment
& Consumer Usage Level
Fintech Ecosystem
Country Potential
Investments in the fintech environment have
grown by a compound annual growth rate
(CAGR) of 65 percent between 2010 and
2015.
The U.K. leads the global fintech field due to
four specific factors: capital (e.g., access to the
public markets, start-up capital and grown
capital); demand (e.g., adoption by local
consumers, corporates and SMBs); talent (e.g.,
availability of technical, financial services and
entrepreneurial talent) and policy (e.g.,
taxation policy, government programmes).
$22,265
($ in millions)
EU RO P E
$12,688
AS I A
U . S.
$4,590
$3,175
U.S.
$ 1 ,7 9 1
2010 2011 2012 2013 2014 2015
66%
of consumers
Nearly
used a Fintech product in 2016
Fintech start-ups
in Asia
4162
GERMANY
2433
AUSTRALIA
3351
HONG KONG
Fintech start-ups
between the U.K. and U.S.
6 6.5 1.5 6.5
SINGAPORE
$ 2, 5 3 7
4,000 2,000
6575
U.K.
1244
TALENT
CAPITAL
POLICY
DEMAND
Given German consumers’ stubborn
preference for cash and their low adoption
of digital banking, it is interesting that Berlin
has emerged as such a hub of fintech
energy. With the fallout from Brexit yet to
play out, could Berlin move up the ranks at
the expense of London?
Out of the myriad developments in fintech, two areas stand out
for their relative maturity: m-payments and P2P payments.
These are the focal points for this study.
U.K. P2P Payments Scenario
U.K. M-Payments Scenario
U.K. m-payments are gaining traction. In
terms of m-commerce value, eMarketer
reports a CAGR of 37 percent between
2014 and 2015. It also predicts a CAGR
TSYS predicts that,
of 17 percent between 2016 and 2019.
Moreover, consumer research from both in two years time,
68% of U.K.
TSYS and MasterCard found that British
consumers will be
consumers are likely to use their
using m-payments
smartphones to make a significant
in-store
number of in-store m-payments in the
coming years.
68%
®
Relative to P2P payments,
the value and volume from
some of the U.K. P2P players are
encouraging. Paym, a
P2P payment provider, has
witnessed a 2015 year-to-year
growth of 362 percent in
transaction volume.
2014
2 4 .9
2 9 .8
2015
3 4 .0
3 8. 0
2015
Paym
BANK
63%
PAYMENT SCHEME CARD
(e.g., Mastercard, Visa )
63%
SPECIALIST P2P
PAYMENTS PROVIDER
56%
(£ IN BILLIONS)
2 0 .1
2014
TOP 3 MOST TRUSTED P2P PAYMENT PLATFORMS
M-COMMERCE ACTUAL AND POTENTIAL VALUE
1 4 .6
+362%
®
EST 2016 EST 2017 EST 2018 EST 2019
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
(e.g., Paym, PayPal )
®
6
Key Insights
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
7
K E Y I NS IG HTS
Eight insights
from our study:
1
Within the next two years, 68 percent of the respondents
are likely to use m-payments for in-store purchases.
3
The adoption level of in-store
m-payments, at 24 percent, falls
behind that of P2P payments at
34 percent.
Considering both methods have the same level of
consumer awareness, in-store m-payments show
great potential.
2
The adoption of mobile banking
apps no longer remains the
exlusive domain of "digital natives."
As forecasted in 2015, mobile banking adoption
shows a significant increase, to 67 percent (2016)
from 58 percent (2015).
4
Thirty-nine percent of respondents
made an in-application (in-app)
m-payment in the last six months.
The awareness level of in-app m-payments is
extremely high at 75 percent.
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
8
K E Y I NS IG HTS
5
When it comes to in-store
m-payments, consumers trust
financial institutions
more than any other type of organisation to
safeguard their personal financial information.
7
When it comes to P2P payments, consumers hold a
similar level of trust
with financial institutions, card schemes and digital
wallet providers.
6
Security and fraud protection
would be the primary factors
influencing consumers to use in-store m-payments.
8
A significant percentage of
consumers, 52 percent, would be likely to use a location-
based service
to receive offers or discounts on their smartphone
from a restaurant, merchant or coffee shop when
in close proximity.
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
9
Findings & Insights
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
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FI ND I N GS & INS IG HTS
Segmenting the Respondents by Digital Capabilities:
Rogers’ Diffusion of Innovation Theory
According to Rogers’ diffusion of innovation theory,8
there are five different types of technology adopters:
Innovators, Early Adopters, Early Majority, Late
Majority and Laggards. For this study, we combined
these groups to create three categories according to
their usage of mobile banking apps. Our categories,
together with Rogers’ theory, provide us a predictive
framework for making conclusions regarding
emerging trends.
once a technological trend gains a foothold. In
our context, they are the respondents who use
a mobile banking app less than monthly to a few
times a month.
• Emerging Digitals represent Rogers’ “Laggards”
segment. This group is the last to try and potentially
adopt a new technology. For the purposes of our
research, they are the respondents who use a
mobile banking app less than once a month or have
never used it.
• Hyper Digitals represent the “Innovators” and “Early Adopters” categories. These consumers are the first to use and value an innovation—
helping to diffuse a new technology. These are the
respondents who use a mobile banking app daily.
Particular attention should focus on Hyper Digitals,
who are the pioneers of new banking features. A
positive user experience among this segment means
other consumers — “Accomplished Digitals” and
“Emerging Digitals” — will mostly follow their lead,
based on customer satisfaction, loyalty and word-ofmouth advocacy.
• Accomplished Digitals represent the “Early
Majority” and “Late Majority” segments. This group
follows the “Innovators” and “Early Adopters”
Rogers Diffusion of Innovation:
Adopter Categories
BI TC OI N
3% usage level
P2P PAYME NT
34% usage level
EA
R LY
AD
O
E
PT
MA
R LY
EA
!
RS
JO
C O N TACT L ESS PAY M EN T
51% usage level
L AT
RITY
EM
A
JO
RIT
DEB I T &
C R EDI T CA R DS
Y
CH E QUE
LA
GG
AR
FA I L U R E
I N - STOR E
M-PAYME NT
24% usage level
I N - A P P M - PAY M EN T
39% usage level
S
ATO R
I N N OV
DS
2.5%
13.5%
34%
34%
16%
Innovators
Early Adopters
Early Majority
Late Majority
Laggards
Please select the option that best describes your usage of a mobile banking app.
Use it daily
22%
Use it a few
times a week
21%
Use it a few
times a month
12%
Use it once a month
5%
Use it less
than monthly
5%
Do not use
33%
Digital Capability
22%
39%
39%
HYPER
ACCOMPLISHED
EMERGING
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
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FI ND I N GS & INS IG HTS
Mobile Banking Apps: From
"The Marmite Effect" to a
Growing Movement
We investigated how often U.K. consumers
digitally interact with mobile banking apps relative
to more traditional channels like online banking,
ATM, bank branch and telephone banking. For
the purposes of this study, we defined a “mobile
banking app” as an app that allows customers
of a payment provider to conduct a number
of financial transactions — viewing account
balances and transactions, moving money
between accounts, making payments to new and
existing payees, choosing how to receive account
statements, etc. — through a mobile device such as
a mobile phone or tablet.
According to the consultancy firm CACI®, the
number of branch visits in the U.K. is set to
decrease over the next four years as people turn
to mobile banking. Surprisingly, they also predict
online banking usage to drop.9
While the TSYS study did not show a decline
in online banking, the findings suggest that
consumers are moving away from traditional
banking channels such as bank branch and
telephone banking. Instead, customers are
seeking out self-service channels such as “Online
Banking,” “ATM,” and “Mobile Banking App.”
(See Graph 1.)
OMNI-CH A NNE L G ROW ING R E L E VA NCE
While non-traditional channels are gaining
ground with consumers, insights from our study
confirm that consumers increasingly expect
consistent service across all channels. Engaging
customers with an omni-channel approach can
guarantee a seamless and consistent banking
experience. Furthermore, this is crucial for banks
in order to optimise their strategy toward more
profitable customers.
Graph 1:
How often do you use each of the following methods to
access your banking services?*
83% +3%
Online Banking
75%
ATM
56%
Mobile Banking App
Bank Branch
Telephone Banking
Variation
from 2015
35%
23%
+1%
+12%
+6%
+11%
* Percentage of those who use a specific channel more than
once a month.
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
12
FI ND I N GS & INS IG HTS
Graph 2:
Analysis of m-banking app usage
M-Banking Usage by Age
M-Banking Usage by Regions
18-24
88%
25-34
89%
71%
35-44
51%
45-54
16%
65 & older
AG E:
P HONE:
M-Banking Usage by Educational Level
52%
61%
74%
London & South East
PROFILE OF A
TYPICAL M-BANKING USER
32%
55-64
63%
Rest of the U.K.
E D UCAT ION:
74%
REGION:
26
Apple®
Graduate
London
M-Banking Usage by Smartphone Type
82%
61%
39%
Below GCSE /
0-Level
A-Level or
Equivalent
Bachelor or
Postgraduate
Apple
THE Y E A R O F T H E MO BI L E BA N K I N G A PP
When compared to the previous year’s study,
consumers’ usage of “ATMs” and “Online Banking”
remained steady, while “Mobile Banking”
experienced a significant increase of 9 percent.
In 2015, we noticed the “Marmite effect” with
m-banking apps whereby people use them a
lot or not at all. During the course of the past
year, mobile banking app usage has rendered
this effect obsolete. Rather, 2016 just might be
the year of the mobile banking app, reflecting
consumers’ increased understanding of the
benefits offered by m-banking apps.
Android
®
Others
(e.g., BlackBerry )
®
M-BA NK ING A PPS NO LONG E R E XCLUS I V E
D OM A IN OF MIL L E NNI A L S
Data from our study dispels the popular belief that
m-banking apps are the exclusive domain
of millennials, those often characterised as
digital natives. (See Graph 2.) Across our three
segments, including Digital Immigrants — those
aged A-B, the usage level of banking apps is over
50 percent. Seventy-one percent of respondents
aged 35-44 reported using an m-banking
app. Only those aged 55 and older showed a
usage below 50 percent. In comparison to last
year’s study, all age groups have increased
their m-banking app usage. What used to be
exclusively the domain of digital natives is now
embraced by a wider audience.
Key Observation: Further analysis reveals that
consumers living in London and the South East
who own an Apple smartphone and hold a
higher level of education are more likely to use
m-banking apps.
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
13
FI ND I N GS & INS IG HTS
MOST P O P UL A R M- BA N K I N G ACT I V IT I ES
Among respondents who downloaded the
m-banking app, we identified the most popular
actions undertaken in the last six months.
Consistent with 2015 findings, the top reason for
using a banking app is to “Verify balance” (82
percent), which confirms its high popularity for
more passive activities. Surprisingly, “Transferred
money between accounts” (72 percent) has
outpaced one of the most popular actions of
2015, “Verify recent transactions” (69 percent),
with an 8 percent increase over 2015. Our
findings suggest U.K. respondents hold increased
confidence levels with conducting financial
transactions via mobile devices, confirming the
growing trend of mobile banking and payment
management functionalities.
NE W O P P O RTUNIT I ES TO E N GAG E
CA RD HO L DERS
The popularity of activities such as “Verify balance”
and “Verify recent transactions”
suggests an opportunity exists to proactively
engage cardholders with alerts. According to
the TSYS 2016 U.K. Payment Study,10 cardholders
value deciding when and how they receive alerts,
whether that is when their balance falls below a
predetermined threshold or after each card-notpresent transaction. (See Graph 3.)
Graph 3:
Using your mobile phone and banking app, which of the
following have you done in the past six months? Please
select all that apply.
Variation
84%
Verify balance
82%
64%
Transfer money
between accounts
72%
69%
Verify recent
transactions
69%
63%
Make bill payments
64%
46%
Receive an alert
from your bank (e.g.
49%
message or email)
32%
Locate the closest
in-network ATM or
bank branch
Deposit a cheque
to your account
electronically using
your mobile
phone camera
None of these
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
+8%
+0%
+1%
+3%
+4%
36%
14%
+7%
21%
1%
+0%
1%
2015
-2%
2016
14
FI ND I N GS & INS IG HTS
Leading Reasons Consumers
Are Not Using M-Banking Apps
The top reason respondents gave for not using
m-banking apps is “My banking needs are being met
without mobile banking.” (Graph 4.) This is consistent
with responses regarding the usage level of specific
banking services. (See Graph 1.) In effect, ATM and
online banking have higher usage levels than that
of m-banking apps. It’s also evident that security
is one of the most significant factors attributed to
consumers not using mobile banking apps — whereas
the screen size and lack of ability have the lowest
impact. Banks should deliver a secure experience
and educate customers about it.
Opportunities exist for banks to improve engagement
with those customers reporting no or low usage
of mobile banking apps. Engaging these no- or
low-use segments would help drive loyalty, and
correspondingly retention rates. Payment providers
should develop marketing messages with relevant
and personalised recommendations based on
customer data including purchasing habits.
Graph 4:
There could be many reasons you chose not to use a
mobile banking app. Please indicate your agreement or
disagreement with the following statements.*
My banking needs
are being met
83%
I am concerned about
potential hacking
74%
I am concerned about
the security of mobile
banking apps
13%
70%
The mobile phone
screen is too small
I am concerned about
my lack of technical
knowledge
10%
53%
18%
Agree
17%
31%
32%
Neutral
7%
13%
13%
16%
49%
Disagree
*Among the 33 percent of respondents reporting to not have
an m-banking app.
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
15
FI ND I N GS & INS IG HTS
An Encouraging
M-Payment Trajectory
Over the last two years, the 5 percent CAGR
of m-commerce has outpaced the 2 percent
witnessed by e-commerce.11 Moreover, according
to the global market research firm TrendForce®,
the penetration of major smartphone brands —
such as Apple and Samsung® — into payments
has propelled the worldwide revenue of mobile
payments to reach $450 billion in 2015. Revenue
forecasts for 2016 are expected to experience a
37.8 percent increase, translating to $620 billion.12
The Financial Times reports m-payment apps are
soaring in popularity in both the U.K. and the U.S.
Pingit®, Barclay’s mobile payments app, reached 1 million business transactions in January 2016, up 10 percent from the prior year.13
According to research firm
TrendForce, the penetration of
major smartphone brands —
such as Samsung and Apple
— into payments has propelled
the worldwide revenue of mobile
payments to reach $450 billion in 2015.
In this year’s study, we explored the behaviour
and attitudes of U.K. consumers in the area of
two types of m-payments: in-app m-payments,
a payment consumers make directly from their
smartphones to buy something online through
a merchant app such as Amazon®, and in-store
m-payments, the use of a mobile device to make a
purchase at a physical point of sale.
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
16
FI ND I N GS & INS IG HTS
AWA RE NESS L E V EL S A N D USAG E
OF IN- A P P M- PAY ME N TS
usage (66 percent), followed by the Accomplished
Digitals (56 percent) and Emerging Digitals (6
percent). (Graph 5.)
Our study found the vast majority (75 percent)
of respondents are aware of in-app payments.
Further, almost 40 percent have made an in-app
m-payment in the last six months. As anticipated,
the Hyper Digitals have the highest percentage of
Key Observation: From the study data, we found
that those making in-app m-payments tend to
be younger, more highly educated and inclined to
own an iPhone®. (Graph 7.)
Graph 5:
Awareness Level versus Usage Level of In-App
M-Payments
Awareness Level versus Usage
Graph 6:
Usage of In-App M-Payments in the Last Six Months
Across Digital Adoption
Usage ofSegments
In-App M-Payments Across
Level of In-App M-Payments
Digital Adoption Segments
Awareness Level
75%
7
56%
Accomplished
Emerging
Awaren
66%
Hyper
6%
39%
Overall
39%
Usage Level
Graph 7:
Analysis of in-app m-payment usage
In-App M-Payment Usage
by Smartphone Type
50%
In-App M-Payment Usage by Age
35%
55%
18-24
56%
25-34
40%
35-44
30%
45-54
55-64
65 & older
11%
3%
17%
PROFILE OF AN
IN-APP M-PAYMENT USER
AG E :
PHONE:
E DUCAT I O N:
26
Apple
Graduate
Apple
Others
(e.g. BlackBerry)
In-App M-Payment Usage
by Educational Level
20%
Below GCSE /
0-Level
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
Android
35%
A-Level or
Equivalent
45%
Bachelor or
Postgraduate
17
FI ND I N GS & INS IG HTS
T Y PE O F P URCH AS ES M A D E W ITH I N -A PP
M-PAY ME NTS
Among the 39 percent of respondents reporting
usage of in-app m-payments, Graph 8 shows the
most common type of purchases made.
The usage level of in-app payments has
increased, with “Purchase clothes online” ranked
as the most popular type of purchase with
a 5 percent increase over the past year. The
growing popularity of in-app m-payments may
be attributed to e-tailers like Amazon who have
integrated “one-click” functionality into their
mobile experiences. Doing so supports an easy,
fast and secure way for consumers to pay and
avoids the hassle of inserting personal details
with every purchase. Following the launch of
Amazon Echo®, a voice-enabled wireless speaker
developed by Amazon.com®, it will be interesting
to watch the usage of this payment feature.
Other in-app m-payment scenarios ranked high
by consumers include “Pay utility bill” (48 percent),
“Purchase transportation tickets” (46 percent)
and “Purchase digital content” (46 percent),
with the first two increasing by 5 and 16 percent
respectively. We attribute this increase to the
growing trend of m-banking apps, e-wallets and
transport apps (e.g., TPExpress app and First Bus)
that offer a frictionless and seamless payment
experience for customers. In fact, among instore m-payment in-app users, 48 percent of
Londoners have used the apps for purchasing
transportation tickets.
Scenarios that ranked lower include "More
complex purchases", "Higher value purchases",
"Lack of well-developed infrastructure for
m-payments", "The relatively low relevance of
mobile online or in-app environment".
Graph 8:
Please indicate how often you used your smartphone
over the last two months to make an in-app mobile
payment in the scenarios listed below.
Purchase clothes
online (e.g.,
48%
Amazon, Zalando ,
ASOS , eBay )
53%
®
®
®
43%
Pay utility
bill online
48%
Purchase
transportation
tickets online
30%
46%
(e.g., train, bus,
taxi)
Purchase digital
content (e.g.,
47%
iTunes , music,
ebook, PDF file)
46%
®
Purchase
electronic
appliances
on-line
36%
43%
Purchase tickets
online (e.g.,
38%
sporting events,
theatre, cinema)
42%
Purchase other
tangible items
online (e.g., bike
NA
Purchase
groceries
on-line (e.g.,
NA
40%
accessories)
40%
Online Morrison,
Tesco )
®
2015
2016
*Respondents reporting to have made an in-app
m-payment in the listed scenarios at least three
times over the two months prior to survey
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
18
FI ND I N GS & INS IG HTS
Graph 9:
When shopping online (check out and pay), how
often do you use the following devices?
CONS UME RS ’ DE V ICE PR E FE R E N CE
W HEN S HO P P I NG O N L I N E
When shopping online, U.K. consumers favour
their PC/laptop, immediately followed by
the smartphone, then the tablet. (Graph 9.)
Consumers’ preference for shopping with a PC/
laptop is consistent with their perception that it is
more secure than shopping with other devices. In
contrast, the Hyper Digitals are more likely to use
a smartphone when shopping online. As Rogers’
diffusion of innovation theory suggests (see
page 11), in the near future we should expect
an increase in consumers using smartphones to
shop online.
73%
76%
Laptop & PC
86%
62%
67%
Smartphone
95%
60%
Tablet
IN-STO R E M- PAY MEN TS
54%
(iPad , etc.)
®
Study findings show, while 81 percent of
respondents are aware of in-store m-payments,
only 24 percent have made such a payment in
the last six months. Of those who have made
an in-store m-payment, 74 percent reported a
“Good” to “Excellent” level of satisfaction. (Graph
10.) Hyper Digitals are the segment leading
adoption with a 49 percent usage rate.
73%
2015
2016
Hyper
Graph 10:
Awareness, usage and satisfaction levels for in-store
m-payments
Usage of In-Store M-Payments in Six Months Prior
to Survey Across Digital Adoption Segments
81%
31%
Accomplished
Emerging
Awareness Level
49%
Hyper
Awareness Level Versus Usage
Level of In-Store M-Payments
2%
24%
Overall
24%
Level of Satisfaction Among 24 Percent Who
Reported Having Used In-Store M-Payments
2% 4% 20%
48%
Very Poor
Poor
Good
Excellent
26%
Usage Level
Average
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
19
FI ND I N GS & INS IG HTS
STATIST ICA L A NA LYS IS R E L AT E D TO I N STORE M- PAY MENTS : PRO FI L E O F T Y PICA L
U.K. US ER O F M- PAY M E N T I N -STO R E
Key Observation: People interested in in-store
m-payments tend to be younger males who hold
a higher level of education, live in London, and own
an Apple smartphone. As expected, iPhone users
outpace others, given that Apple Pay launched in
the U.K. well before other m-payment platforms
were established in-market.
Graph 11:
Analysis of in-store m-payment usage
In-Store M-Payments Usage by Age
In-Store M-Payments Usage by Regions
35%
18-24
40%
25-34
20%
23%
35-44
Rest of the U.K.
13%
45-54
55-64
4%
65 & older
3%
AG E :
PHONE:
E D UCAT I O N:
In-Store M-Payments Usage
by Educational Level
12%
Below GCSE /
0-Level
40%
PROFILE OF
A TYPICAL IN-STORE
M-PAYMENTS USER
20%
A-Level or
Equivalent
REGION:
G E N D E R:
26
Apple
Graduate
London
Male
London
In-Store M-Payments Usage
by Smartphone Type
36%
30%
Bachelor or
Postgraduate
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
16%
Apple
Android
12%
Others
(e.g., BlackBerry)
20
FI ND I N GS & INS IG HTS
The most popular in-store m-payment
transaction is “Purchase coffee” (69 percent). Most
likely this is driven in part by the success of the
Starbucks® digital wallet and its loyalty programme.
The surprisingly high rankings of other activities
such as clothes and electronics purchases may
be attributed to the increasing number of POS
terminals accepting contactless payments, Apple
Pay’s reach among a broader set of U.K. banks
and the emerging mobile strategy of banks
incorporating an in-store m-payments option
into their m-banking app, such as Barclay’s
m-banking app.
Key Observation: Among the 24 percent to have
used in-store m-payments, a correlation exists
between region of provenance and in-store
m-payments made for transportation tickets
— 67 percent of Londoners have used in-store
m-payment for transportation tickets versus 43
percent coming from other U.K. regions. Also, Hyper
Digitals showed significantly higher usage levels for
the overwhelming majority of in-store m-payment
scenarios. (See Graph 12.) Considering the Rogers’
diffusion of innovation theory, the Hyper Digitals’
behaviour indicates long-term attractiveness fo
in-store m-payment transactions.
Graph 12:
Please indicate how often you used your phone to
make a mobile payment at the locations listed below
over the past six months.
69%
Purchase Coffee
(Starbucks, Café
Nero, Costa
Coffee , etc.)
88%
®
65%
Pay at a
Restaurant
79%
62%
Purchase
Groceries
79%
56%
Purchase
Electronics,
Appliances
70%
56%
Purchase
Clothes
72%
55%
Purchase
Tickets (Sporting
Events, Theatre,
Cinema)
65%
52%
Transportation
(Underground,
Bus, Tax, etc.)
63%
2016
Hyper
*Among the 24 percent of respondents reporting to have
used an in-store m-payment in the listed scenarios at least
three times over the six months prior to the survey
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
21
FI ND I N GS & INS IG HTS
W H AT MIG HT DR I V E H IG H E R I N -STO R E
M-PAY ME NTS I N T H E CO M I N G Y E A RS ?
Our study findings revealed features that would
attract consumers to in-store m-payments.
“Security and fraud protection” at 88 percent is
the most compelling feature, followed by selfdirection initiatives, with 81 percent expressing
an interest in the “Ability to instantly check my
balance.” (Graph 13.) As with our previous study,
immediacy and security functions represent
compelling features that should further propel
usage of in-store m-payments.
Loyalty incentives are attractive features too,
which have gained popularity with over 70
percent preferring “Special offers or discounts
provided at the time of purchase” and “Ability
to install all my loyalty cards in the phone.” We
believe loyalty programmes can significantly
boost the use of in-store m-payments,
especially in the U.K. market, where 94 percent
of the population belongs to a loyalty scheme.14
Additional support for in-store m-payments is
shown by U.K. consumers’ preference for “The
ability to scan items in store” (72 percent) and
“Not having to enter the PIN in the presence of
clerks” (71 percent).
Graph 13:
How influential would the following features be in
attracting you to use mobile payments in-store on
your smartphone?
Variation
87%
Security and
fraud protection
88%
77%
Ability to
instantly check
my balance
81%
Special offers or
discounts
provided at the
time of purchase
67%
Ability to install
all my loyalty
cards in the
phone
68%
75%
74%
Not having to
enter my PIN in
the presence of
clerks
66%
The ability to scan
items in the store
and check out on
my smartphone
65%
Reward program
associated with
the specific
mobile app
65%
72%
71%
70%
54%
Ability to leave
my physical
wallet at home
65%
Instant application
and approval of a
new credit card
account directly
from your phone
49%
64%
2015
+1%
+4%
+8%
+6%
+6%
+6%
+5%
+11%
+15%
2016
*Percentage of respondents selecting “Somewhat
Influential,” “Influential” and “Very Influential.”
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
22
FI ND I N GS & INS IG HTS
Graph 14:
Over the next two years, what percentage of your
in-store purchases made with your phone will replace
your use of physical, plastic credit and debit cards?
2016
2015
32%
23%
27%
24%
31%
0% of purchases
25% of purchases
75% of purchases
100% of purchases
U.K. CO NS UME RS ’ P RO PE N S IT Y TO
US E IN - STO R E M- PAY M E N TS
Although the current usage level of in-store
m-payments is 24 percent, the potential is
promising. Sixty-eight percent of respondents
reported an expectation to use in-store payments
in the next two years, and 45 percent of these
respondents would use in-store m-payments
for at least 50 percent of their purchases. While
interest does not always translate to behaviour,
respondents remain bullish with their attitudes
for short- to mid-term usage of in-store
m-payments. (Graph 14.)
T Y PE O F PAY ME NT M ETHO D W IT H
IN-STO R E M- PAY MEN TS
The 68 percent of respondents likely to use instore m-payments in the next two years were
asked how apt they would be to use different
methods for making them. “Debit Cards” and
“Credit Cards” ranked highest with 72 percent and
65 percent of the sub-segment indicating they
would be “likely” or “very likely” to use them. “Direct
from your bank account” came in at 55 percent
and “Prepaid Card” at 40 percent. (Graph 15.)
Taking into account both the U.K. consumers’
security concerns with in-store m-payments
and the secure nature of credit cards, we were
surprised to discover that debit card outpaced
credit card for most likely payment method.
17%
25%
14%
4%
3%
50% of purchases
Graph 15:
How likely would you be to use the following methods
for in-store m-payments?
72%
Debit Card
80%
67%
Credit Card
80%
55%
Direct from
your bank
account
69%
43%
Top-up
account (e.g.
57%
Starbucks)
40%
Prepaid Card
56%
2016
Hyper
*Percentage of respondents selecting "Somewhat
Likely" or "Extremely Likely"
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
23
FI ND I N GS & INS IG HTS
Authentication technologies continue to advance,
particularly with the steady emergence of
new fintech players. When it comes to using
m-payment apps for in-store payments,
respondents trust their payment providers to
safeguard their personal financial information
more than other types of companies. However,
consumers’ sentiment has dipped slightly over the
course of the past year. (See Graph 16.)
While many mobile device manufacturers
and fintech start-ups are launching new apps
promising users a secure and easy mobile
payment experience, banks should act now to
leverage this position of trust before it is eroded
by newer entrants.
Graph 16:
There are a number of sources from which you can
get an app for your smartphone to facilitate making
a mobile payment. Whose mobile payment app
would you most trust to safeguard your personal and
financial information?
My primary
financial
institution/bank
62%
54%
Payment card
scheme (e.g., Visa,
18%
Mastercard,
American Express )
26%
®
Mobile device
manufacturer (e.g.,
11%
Apple, Nokia , Samsung,
Blackberry, etc.)
8%
®
Online retailer (e.g.,
Amazon, Ebay, Argos ,
ASOS, etc.)
®
3%
4%
Mobile network
operator (e.g.,
2%
Mobile device
operating system
provider (e.g., Android,
2%
High street retailer
2%
Vodafone , EE, O2,
Three, etc.)
®
Microsoft , etc.)
®
(e.g., Currys , M&S,
Boots, etc.)
®
3%
3%
1%
2015
2016
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
24
FI ND I N GS & INS IG HTS
The Potential of
P2P Payments
P2P payments are the method where cardholders
can transfer funds from their bank account or
credit card to another individual's account via
the Internet or a mobile phone. They can allow
people to transfer money more efficiently and at
a lower cost, eliminating the need to visit a money
transfer agency, using cheques or finding an ATM
for cash. Business Insider forecasts global growth
of P2P transfers and remittances at a CAGR of
45 to 50 percent between 2016 and 2018. This
represents a potential global market value of
nearly £700 billion.15
Our study found that 81 percent of respondents
claimed familiarity with P2P payments and 34
percent claimed to have used them. Again, Hyper
Digitals lead the way, being the most active users
of this technology. (Graph 17.)
Key Observation: Reported P2P usage, at 34
percent of respondents, is outpacing in-store
m-payments by 10 percent.
Graph 17:
Usage and Awareness Levels of P2P Payments
Awareness Level Versus Usage
Level of P2P Payments
Awareness Level
81%
Usage Level of P2P Payments in the Prior
Six Months Across Digital Adoption Segments
51%
Hyper
43%
Accomplished
Emerging
Overall
14%
34%
34%
Usage Level
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
25
FI ND I N GS & INS IG HTS
Graph 18:
Short-term propensity to use P2P payments
Short-Term Propensity to Use P2P Payments
Very Unlikely
25%
9%
Key Observation: Our findings indicate that 15
percent of respondents use both P2P and in-store
m-payments. (Graph 19.)
15%
Unlikely
11%
USAG E L E V E L OF P2P PAY ME NTS
BY SO CIODE MO G R A PHICS A ND
S M A RTPHONE OW NE RS HIP
36%
Neutral
46%
Key Observation: For P2P payments, we saw a
correlation between usage level and different
sociodemographic factors. Younger consumers
with a higher level of education, who earn a higher
income and who own an Apple smartphone tend
to be more likely to use P2P payments.
19%
Likely
Very Likely
After explaining the concept of P2P payments
to the 66 percent who had not used it, only 24
percent indicated they would be “Likely” or “Very
Likely” to use P2P payments in the next year.
(Graph 18.)
26%
5%
9%
2016
We also identified the percentage of overall U.K.
respondents reporting to have used both P2P
and in-store m-payments. We discovered that
15 percent of U.K. respondents used both of the
above mentioned payment methods. Moreover,
we found a significant association between the
two payment methods. It means that people that
use P2P payments are likely to use m-payments
in-store and vice versa.
Hyper
Graph 19:
Usage level of P2P payments by sociodemographics
and smartphone ownership
P2P Payment Users &
M-Payment In-Store Users
P2P Payment Users
34%
15%
24%
In-Store
M-Payment Users
U.K. Population
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
26
FI ND I N GS & INS IG HTS
Graph 20:
Analysis of P2P payment usage
P2P Payment Usage by Age
52%
18-24
37%
£50,000 - £75,000
16%
55-64
38%
£30,000 - £50,000
27%
45-54
26%
£20,000 - £30,000
36%
35-44
31%
Less than £20,000
42%
25-34
65 & older
P2P Payment Usage by Income Level
50%
£75,000 - £125,000
0%
53%
£125,000 or more
PROFILE OF A TYPICAL
P2P PAYMENT USER
AG E :
E DUCAT I O N:
P2P Payment Usage by
Educational Level
24%
Below GCSE /
0-Level
27%
A-Level or
Equivalent
IN CO ME :
28
Graduate
£55,000
42%
Bachelor or
Postgraduate
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
P2P Payment Usage by
Smartphone Type
43%
29%
Apple
Android
24%
Others
(e.g., BlackBerry)
27
FI ND I N GS & INS IG HTS
CONS UME R T R UST L E V E L BY P2 P
PAY ME NTS FACI L ITATO R
Key Observation: The top three sources
consumers trust for P2P payments are “My
primary financial institution/bank (Mobile banking
app)" (63 percent), “Payment card scheme” (63
percent) and “Specialist digital wallet provider” (56
percent). (Graph 21.) The level of trust consumers
place in digital wallets such as PayPal and Paym
is interesting. Consumers’ trust met by a positive
customer experience could encourage adoption,
helping P2P payments reach a tipping point.
Graph 21:
There are a number of sources that facilitate making
P2P payments. How likely would you be to trust the
following types of organizations to safeguard the
payment transaction?
My primary
financial
institution/bank
63%
Payment card
scheme
63%
70%
(e.g., mobile
banking app)
(e.g., Visa, Mastercard,
American Express)
69%
Specialist digital
wallet app
provider
56%
63%
(e.g., Paym, PayPal)
Mobile device
manufacturer
44%
(e.g., Apple Pay,
Samsung Pay)
63%
42%
Online retailer
(e.g., Amazon, Ebay,
Argos, ASOS, etc.)
57%
Mobile network
operator
40%
(e.g., Vodafone, EE,
O2, Three, etc.)
62%
38%
High street retailer
(e.g., Currys, M&S,
etc.)
49%
Mobile device
operating system
provider (e.g.,
36%
53%
Android, IOS, etc.)
Social media
platforms
25%
(e.g., facebook ,
Snapchat , Twitter )
®
®
42%
®
2016
Hyper
*Percentage responding either “Likely” or “Very Likely.”
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
28
FI ND I N GS & INS IG HTS
Graph 22:
How influential would the following features be in
attracting you to use P2P?
61%
Guaranteed
security and
fraud protection
69%
Trustworthy P2P
platform provider
(guaranteed
reliability)
58%
67%
Presence of an
established
consumer protection
regulation
55%
67%
Ability to
immediately
receive or send
money to a peer
52%
66%
Low or zero
commission
transfer fee
50%
63%
2016
Hyper
*Percent responding either “Influential” or “Very influential”
DRI V ERS O F P 2P PAY M E N TS G ROW TH
Our study found that the number-one feature that
could influence consumers to use P2P payments
is “Guaranteed security and fraud protection”
(61 percent) followed closely by “Guaranteed
reliability” (58 percent) and “Presence of an
established consumer protection regulation”
(55 percent). (Graph 22.) This is consistent with
findings detailed in Graph 21. When it comes to
P2P payments, consumers would be more likely
to trust players with an established and reliable
reputation in the banking and payment ecosystem
such as banks and payment card providers.
Other influencers that could play a crucial role are
related to the immediacy and convenience (low or
zero commission transfer fee).
Currently, a high level of uncertainty surrounds
the P2P payments as they relate to reliability
and regulatory oversight. Until this is resolved,
established banks should take steps to
understand how to leverage this technology
and their enviable position of trust.
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
29
FI ND I N GS & INS IG HTS
Location-Based
Services (LBS)
LBS use real-time geo-data from a mobile
device or smartphone to provide information,
entertainment or security. Some services allow
consumers to "check in" at restaurants, coffee
shops, stores, concerts, and other places or
events. Today, companies use LBS in several ways,
from store locators and gaming to fraud-location
for credit cards.
PIONE E RS O F L BS : U BE R, STA RBUCKS A N D ,
Y ES, P O K ÉMO N G O
One of today’s most popular apps relying on LBS
is Uber®. Based on the location of one’s phone
when in use, the app is able to signal a car and
suggest how quickly the driver can reach the
designated pick-up location. The coffeehouse
chain Starbucks represents an example of how
to apply an LBS marketing strategy. In the U.S.,
Starbucks uses location-based communication to
enhance the customer experience by providing
personalised promotions and offers on customers’
mobile devices. Pokémon Go®, a gaming app
launched in the U.K. in July, has been met with
phenomenal popularity. The smartphone app
uses LBS to allow users to travel between real
and virtual Pokémon® worlds and merchants are
racing to incorporate their physical locations into
the gaming experience. For payment providers,
the explosive rise of Pokémon Go has brought
heightened awareness to LBS and is set to help
marshal in a new era in which consumers accept
and indeed expect LBS offers.
THE P OTE NTI A L OF L BS
Considering the treasure trove of data held by
banks, LBS offers the potential for partnership
marketing agreements between banks and
merchants, programmes commonly referred to
as card-linked offers. This year, our study asked
questions related to LBS to assess the potential
within this new revenue stream.
Our research findings reveal that 52 percent of
U.K. consumers would be open to receiving offers/
discounts on their smartphone from restaurants,
merchants or coffee shops when they are within
close proximity. (Graph 23.)
Graph 23:
How open would you be to receiving offers/discounts
sent directly to your smartphone from a restaurant,
merchant or coffee shop when you're in the vicinity?
17%
Extremely likely
35%
Somewhat likely
Neither likely
nor unlikely
Somewhat unlikely
Extremely unlikely
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
25%
8%
15%
30
FI ND I N GS & INS IG HTS
Graph 24:
Statistical analysis related to LBS
LBS Consumer Propensity
by Regions
64%
47%
Rest of the U.K.
44%
60%
42%
London & South East
Apple
Key Observation: People living in London and the
South East and those owning an iPhone would
be more likely to use LBS. Beyond those two
characteristics, however, it is too early to identify a
“typical” profile of a U.K. LBS user. This is interesting
since in the past adoption of such technologies
was often associated with the younger and
better-educated consumers. In the digital era,
this may no longer be the case. When it comes to
loyalty and discount programmes, consumers of
all walks tend to be more motivated to share their
personal data and even sacrifice their privacy in
return for something of value to their individual
lifestyles. (Graph 25.)
The high propensity to use LBS prompted us to
seek a deeper understanding of which consumer
segments would particularly embrace such
options.
FACTORS I NFLUENCI N G CO N S U M E RS TO US E L BS
As expected, the primary factor driving consumer
adoption of LBS is “Consumer privacy protection”
(61 percent). Also, when it comes to LBS,
consumers ranked discounts and loyalty rewards
high at 58 and 56 percent respectively. Finally,
preferential customer treatment has a lower
impact on consumers’ decision-making process
related to LBS. (Graph 25.)
Android
Others
(e.g., BlackBerry)
Graph 25:
When it comes to location-based services (LBS), how
influential are the following features to you?
61%
Consumer
privacy
protection
75%
58%
Discounts
75%
56%
Loyalty rewards
75%
52%
Free WiFi
66%
Preferential
customer
treatment (e.g.,
48%
70%
Jump the queue)
2016
Hyper
*Percentage responding either “Influential” or “Very Influential”
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
31
Conclusion
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
32
CONCLUS ION
The Impact to
Payment Providers
PAY AT T ENT IO N TO E A RLY A D O PTE RS .
As indicated in the 2016 U.K. Consumer
Payments Study, the Hyper Digitals will
spur the tipping point with the adoption
of new technologies. Monitoring their
attitudes and behaviours will help
payment providers develop forwardlooking strategies aligned with the
market’s trajectory.
Payment providers should pay attention to early
adopters, as their behaviour can be predictive of
industry trends. Analysing early adopter attitudes
toward many different payment features and
scenarios in their relationship with payment
providers can reveal strong indicators of how
consumers are shaping a market’s direction.
Delivering features and functionality that delight
early adopters today will put payment providers in
a better competitive position.
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
33
CONCLUS ION
TA K E A DVA NTAG E O F FI RST-MOV E R
A DVA NTAG ES TO PA RTN E R W IT H FI N T E CH .
New entrants in the fintech community are
making inroads on the consumer end of the
payments value chain, at the user experience
and interface level. However, they still fall short
with security and compliance.
When it comes to digital payments, the
longstanding imperative to balance security
and convenience has never been more critical.
Consumers are less willing to accept tradeoffs between security and convenience, they
expect both. This is opening up new opportunities
for collaboration and partnership between
established payment providers and nimble fintech
players who excel at user experience while
investing in the latest risk technologies.
STIMU L AT E CO NS UM E RS ’ N E E D TO BE IN CONT RO L .
The most used feature of the mobile bank is
transferring money between accounts, allowing
consumers to control their finances. Payment
providers should look for new ways to extend
additional controls to their consumer base,
whether monitoring and controlling spending
on specific categories or helping the consumer
manage within their own limits and enabling alerts
to help them stay on top of their financial position
before reaching a consumer-defined barrier.
RE ASS E RT B R A NDS I N TO T H E I N -A PP
PAY ME NT P RO CESS .
App fatigue is a growing likelihood, as consumers
will likely find it increasingly inconvenient to
have a different app for each distinct activity.
Furthermore, in-app payments could lead to
brand erosion, and payment providers who poorly
present these in-app payment experiences will
find themselves missing on a key touch point.
Providers not content with their current role in
the in-app payment experience should look to
reassert their brand into the payment process.
As the payment itself is pushed to the
background, it will be important for payment
providers to leverage their relative position of trust
to re-engage cardholders through increased
loyalty initiatives.
E MB R ACE P2P PAY ME NTS TO R E M A IN R E L E VA NT.
Payment providers that ignore P2P payments do
so at their own peril. Paying friends and family
quickly, with no fuss, is increasing in take-up. This
experience will help to educate consumers on
the benefits of m-payments, and mobile banking
in general. As certain P2P apps gain traction with
consumers, there’s an increased likelihood that
consumers will experiment with m-payments
from alternate providers, rendering m-banking
apps to also-rans that are just for passive
activities like balance inquiries.
L E V E R AG E THE U NIQU E OPP ORTU NIT Y TO
DR I V E M A R K ETING -BAS E D R E V E NU E .
Increasing real-time and context is key for both
communication and payments. Location-based
services (LBS) is poised to play an increasingly
critical role with cardholder engagement,
especially when coupled with the value of
transactional data. In light of the constant revenue
pressures that payment providers face, LBS
presents an interesting proposition with potential
card-linked offers between banks and merchants.
Geo-targeted offers can fulfill the promise of
delivering the right offer at the right time to the
right person — putting payment providers in
a highly competitive position. While most any
merchant or service provider can come along
with beacon alert technology, the payment
provider’s ability to leverage purchase data and
consumer location is a powerful proposition that
could make contextual marketing complete.
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
34
Appendix
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
35
A P P ENDI X
Study Methodology
This research is based on an online survey of 522 U.K. residents. The respondents covered
diverse sociodemographics, including gender, age, income, occupational status and level of education.
To obtain a more representative sample of the target population, we applied a stratified random sampling approach. This involves dividing a population into smaller groups known as
stratae. The stratae are formed based on members' shared attributes or characteristics.16
We can say with 95 percent confidence and a margin of error of +/- five percent that our
sample size of 522 respondents represents the approximately 32 million of people in the U.K.
population that meet the following criteria:
• Hold a debit card
• Hold a credit card
• Own a smartphone
• Are 18 years of age or older
Graph 26:
Comparison between U.K. population over 18 that
own a smartphone and TSYS sample
18-24
25-34
20%
20%
22%
22%
35-44
21%
21%
45-54
21%
21%
55-64
65 & older
11%
11%
6%
U.K. population over 18 owning a smartphone
6%
TSYS U.K. respondents sample
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
36
A P P ENDI X
Graph 27:
U.K. adult cardholders and smartphone owners
32 million
Credit card cardholders
49 million
Debit card cardholders
33 million
Smartphone owners
over 18 years old
51 million
U.K. population
over 18 years old
*Graph not to scale
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
37
A P P ENDI X
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http://www.fintechinnovationlablondon.co.uk/pdf/Fintech_Evolving_Landscape_2016.pdf
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5. Boden, R. (2016). A quarter of Brits will make NFC mobile payments in the next year. NFC World
[Online]. Available at: http://www.nfcworld.com/2016/05/27/345106/quarter-brits-willmake-nfc-mobile-payments-next-year/
6. Paym, (2016). Paym statistical update. [Online]. Available at: http://www.paym.co.uk/newsand-media/
7. TransferWise (2016). TransferWise users move £500 million a month. Globally. [Online]. Available at: https://transferwise.com/blog/2015-06/transferwise-users-move-500-million-a-month-globally/
8. Rogers, E.M. (2003). Diffusion of Innovations (5th ed.). New York: Free Press.
9. Dunkley, M. (2016). Growth of mobile phone apps threatens UK bank branches. Financial
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10. Beard, M. & Longo, L.M. (2016). TSYS 2016 UK Payment Study. [Online]. Available at: tsys.com/infographic/2016-uk-payments-report/
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12. TrendForce, (2016). Global Mobile Payment Market to Reach US$620 Billion in 2016 with Apple
and Samsung Staking Large Claims in the Ecosystem. [Online]. Available at: http://press.trendforce.com/press/20160201-2298.html
13. Noonan, L. (2016). Mobile payment transactions soar in US and UK. Financial Times. [Online]. Available at: HYPERLINK "http://www.ft.com/cms/s/0/e3bbb0c6-c384-11e5808f-8231cd71622e.html" \l "axzz4E0zPySX3" http://www.ft.com/cms/s/0/e3bbb0c6c384-11e5-808f-8231cd71622e.html#axzz4E0zPySX3
14. MYCUSTOMER, (2016). 94% of consumers join loyalty schemes, less than half use them. [Online]. Available at: http://www.mycustomer.com/experience/loyalty/94-of-consumers-join-loyalty-schemes-less-than-half-use-them
15. Heggestuen, J. (2015). THE PEER-TO-PEER PAYMENTS REPORT: The exploding market for
smartphone apps that transfer money. Business Insider UK. 11 May 2015. [Online] Available
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16. Schmidt, M. J., & Hollensen, S. (2006). Marketing research: An international approach. Pearson
education.
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
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A P P ENDI X
About the Authors
MORGA N B E A R D
Director of Strategic Marketing, TSYS Issuer Product Group
Morgan focuses on identifying and prioritising evolving market drivers and their impacts
to TSYS’ issuing clients. In his tenure at TSYS, Morgan has held a variety of roles in TSYS
International and product marketing, where he was responsible for assessing new markets
and delivering product launches and thought leadership efforts.
Before joining TSYS in 2008, Morgan spent 15 years in sales and marketing positions in the U.S.
and Latin America. He’s worked at start-ups and Fortune 500 companies.
Get in touch at [email protected].
DE A N WA L L ACE
Director of Emerging Payments, TSYS Issuer Product Group
Within product and market development, Dean assesses the role that TSYS can play in
emerging payments, sets TSYS strategic market direction recommendations, and identifies
how to execute (internally and externally) to enable market success.
Dean has been in cards and payments for more than 10 years and approximately 20 years
in information technology. Dean’s blue chip background includes start-up experience, and
his speciality today is emerging technologies such as P2P, mobile payments, immediate
payments, digital banking, tokenization, and alternative payments styles.
Get in touch at [email protected].
Lucio Michele Longo, Strategic Marketing Analyst, also contributed to this paper.
2016 U . K . M-PAY MENT A ND P2P PAY MENT CONSUMER STUDY
39
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