Your phone and your money

Our phones have become a device we are inseparable from, and 2015 may be the year they take the role of banker for millions. 2014 saw two developments which could finally take mobile payments to the broader public – Paym and Apple Pay. The majority of us have now been willingly or unwillingly co-opted into one of two technology ecosystems created by iOS and Android. But when it comes to paying via an app or Near Field Communications (NFC) on phones, 63% of British users say they want to wait until mobile payments are more established before considering them.1Ipsos Global @dvisor 3-17 June 2014, 17,519 adults of which 976 British adults use mobile devices.

By next year the vast majority of British banks and building societies will have joined the Paym scheme, which lets you instantly transfer money to friends via your mobile for free. The Payments Council describes Paym as a “a world leading payment service”,2http://www.paymentscouncil.org.uk/files/payments_council/paym/delivering_world_leading_mobile_payments_how_does_the_uk_compare_internationally.pdf with its Faster Payments facility and the service’s widespread access.

However, most people have never heard of it – though at least 10% of under 35s have either used Paym or registered for the service.3Ipsos MORI i-omnibus, 2010 British adults, 10-15 October 2014 of which 672 are aged under 35

Apple’s mobile payment solution, Apple Pay is not expected to arrive in the UK until 2015 or later.4http://www.independent.co.uk/life-style/gadgets-and-tech/apple-pay-wont-come-to-uk-until-2015-although-the-iphone-6-will-be-here-sooner-9729972.html But with 49% of British adult smartphone owners using iPhones,5Ipsos Media CT Tech Tracker, Q3 2014 Apple already has a captive audience.

You probably haven’t come across Zapp yet, but you will. Launching in 2015, five leading banks have already signed up to it, as have the leading payment service providers and some key retail partners with a base of 35 million customers, providing another way to pay with your mobile.

We believe 2015 is the year mobile payments may finally take off. First, more and more of us are using our mobiles to manage our money. The average weekly banking app usage for the UK’s largest five banks was 18.6 million times, up from 9.1 million times in 2012.6http://www.bba.org.uk/wp-content/uploads/2014/03/BBA1810_The_way_we_bank_now_2014_PAGES_ONLINE.pdf Second, more of us are also spending on websites with our phones and tablets, with mobile commerce accounting for 36% of UK e-retail sales.7http://www.imrg.org/index.php?catalog=1221Third, many of us are already using contactless payments in Britain, with an increase of over 200% spent on contactless credit and debit cards from 2013 to 2014 – six contactless payments are made every second in the UK.8http://www.theukcardsassociation.org.uk/news/monthly-contactless-card-spend.asp In September 2014, Transport for London opened up its network to contactless debit and credit cards, banning cash from buses.

What is interesting to us is whether the companies behind these initiatives have fully considered all the tools of behaviour change at their disposal – consumers may have the capability (a smartphone), but do they have the motivation to make the change? Is it that much easier than just putting a card in a slot and entering a PIN?

Simply telling people about the option to pay by phone will not work on its own – it has to fulfil a real (speed, simplicity) or emotional need, and these must overcome people’s dislike of entering their payment details online, even if it’s only once. Where benefits and ease of use are clear, people sign up in their millions – as taxi apps like Uber and Hailo in major cities show.

Either way, our phones will become even more indispensable in 2015.

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