Consumers and Mobile Financial Services
March 2015
Print- Preface
- Executive Summary
- Introduction
- Accessing Financial Services
Accessing Financial Services
Survey respondents were given a set of screening questions that asked if they had access to a bank account, the Internet, and a mobile phone. They were further asked about the various ways in which they access their financial accounts. Of the 87 percent of American consumers who have a checking, savings, or money market account, the majority use some form of technology to interact with their financial institution.
As shown in figure 2, the most common way of interacting with a financial institution remains in-person at a branch, with 87 percent of consumers who have a bank account reporting that they had visited a branch and spoken with a teller in the 12 months prior to the survey. The second-most common means of access in the previous 12 months was using an automated teller machine (ATM) at 75 percent, followed by online banking at 74 percent.8 One-third of all consumers with bank accounts used telephone banking, while 35 percent used mobile banking, up from 30 percent the previous year.9 (For additional information on the use of various banking channels by mobile banking users, see box 2.)
Note: Percentages are of all respondents with a checking, savings, or money market account for each banking channel, regardless of mobile phone ownership or access to the Internet. Questions about usage of bank branches and ATMs were not included on the 2011 survey.
1. For online banking, respondents who reported that they did not have regular access to the Internet other than that provided by GfK were not asked the online banking question in the 2011-2013 surveys. In the 2014 survey, all respondents with bank accounts were asked the question about online banking, which raised the measure for 2014 to 74 percent--2 percentage points higher than if these respondents had been excluded as in prior years.
2. For mobile banking, the percentages here may differ from the incidence rates elsewhere in this report because the latter are computed for those with mobile phones and bank accounts.
Box 2. Channel Use among Mobile Banking Users
Mobile banking can provide convenient access to some banking services. However, consumers may still need or want to use other banking channels. For example, a visit to an automated teller machine (ATM) or branch may be necessary to withdraw cash, and visiting a branch or talking with a customer service representative may be preferred ways of resolving a problem. Respondents to the survey were asked about their use of five banking channels (branch, ATM, telephone, online banking, and mobile banking), and the answers provide a fuller picture of how mobile banking users interact with their bank or credit union.
Users of mobile banking services generally access them frequently, but not to the exclusion of other kinds of bank services. In general, mobile banking users reported using multiple channels to conduct banking business: 82 percent reported using four or five of these channels; only 2 percent used one or two channels. In the prior 12 months, 95 percent of mobile banking users also used online banking, 92 percent used an ATM, 85 percent visited a branch and spoke with a teller, and 36 percent used telephone banking (table A).
Table A. Channel access among mobile banking users
Percent, except as noted
| MB users who used channel in the past 12 months | MB users who used channel in the past month 1 | Median frequency of channel use past month 2 | |
|---|---|---|---|
| Mobile banking | 100 | 90 | 5 |
| Online banking | 95 | 97 | 6 |
| ATM | 92 | 85 | 3 |
| Branch/teller | 85 | 72 | 2 |
| Telephone banking | 36 | 68 | 2 |
1. Of those who used channel in the past 12 months. Return to table
2. Of those who used channel in the past month. Return to table
Most mobile banking users (90 percent) reported accessing mobile banking in the preceding month, and the median number of uses for those who used it in that month was five. Similarly, among mobile banking users who accessed online banking, 97 percent used online banking in the prior month, and the median number of uses of online banking was six. The FDIC has noted that many banks have required their customers to be enrolled in online banking before they can enroll in mobile banking, and some mobile banking features, such as setting up payees for bill payment and enrolling in alerts, may require an online setup.1 These types of bank policies would contribute to the high level of online banking use we observed among mobile banking users. For mobile banking users who accessed ATMs and bank branches, the likelihood of having used those channels in the past month was lower (85 and 72 percent, respectively), and the median number of uses was lower as well (three for ATM and two for branch). These responses suggest that many mobile banking users use online and mobile banking quite consistently for their banking needs, and access other bank channels on a periodic basis.
In a separate question, respondents were asked to rank the three main ways they interact with their bank or credit union. Twenty-one percent of mobile banking users ranked the mobile channel first--a lower share than those who chose online banking (35 percent) or ATM (30 percent), but a higher share than for the branch (13 percent) or telephone banking (1 percent).2 Tallying the share of mobile banking users who ranked each of the channels in their top three, the ATM channel had the largest share (80 percent), followed by online banking (73 percent), mobile banking (60 percent), branch (56 percent), and telephone banking (17 percent).
Taken together, these estimates indicate that while mobile banking users are utilizing technological platforms at a high rate and on a consistent basis, they have also maintained connections to their banks through the more traditional branch and ATM channels.
1. For the full FDIC white paper "Assessing the Economic Inclusion Potential of Mobile Financial Services," see www.fdic.gov/consumers/community/mobile/Mobile-Financial-Services.pdf. Return to text
2. The 2013 FDIC National Survey of Unbanked and Underbanked Households reported the primary banking method for households who used mobile banking and accessed their account in the last 12 months as follows: online banking (50 percent), mobile banking (25 percent), ATM/Kiosk (15 percent), bank teller (7 percent), and telephone banking (2 percent). For the full report on the survey, see www.economicinclusion.gov/surveys/2013household/documents/2013_FDIC_Unbanked_HH_Survey_Report.pdf. Return to text
Mobile Banking
In this Section:
The Federal Reserve survey defines mobile banking as "using a mobile phone to access your bank or credit union account. This can be done either by accessing your bank or credit union's web page through the web browser on your mobile phone, via text messaging, or by using an app downloaded to your mobile phone."10
Adoption Rates
The adoption of mobile banking has continued to increase in the past year. When asked about usage in the previous 12 months, 39 percent of mobile phone users with a bank account reported that they used mobile banking, a proportion that has been steadily climbing (figure 1). Mobile banking among smartphone users with a bank account is substantially higher at 52 percent, up modestly from earlier surveys. The higher incidence of mobile banking adoption among smartphone users suggests that as smartphone adoption continues to increase, mobile banking usage may also increase.
A significant fraction of mobile banking users have only recently adopted the technology. Although the majority of mobile banking users reported that they started using it more than one year ago, 15 percent reported that they adopted mobile banking in the last six months, and 12 percent reported that they adopted mobile banking between six and twelve months ago. Among those consumers with mobile phones who do not currently use mobile banking, 11 percent reported that they will "probably" or "definitely" use mobile banking in the following 12 months.
Although previous surveys suggest that the reported adoption intentions of the respondents do not perfectly reflect subsequent behavior, there is an association between the planned use of mobile banking and subsequent adoption. Using the panel of respondents to both the 2013 and 2014 Board surveys, it is possible to compare the reported mobile banking adoption intention over the next 12 months from the 2013 survey to the reported use of mobile banking in the 2014 survey. Of those consumers who reported in 2013 that they would "definitely" or "probably" adopt mobile banking in the following 12 months, only 28 percent had, in fact, adopted mobile banking one year later. Nonetheless, this is a higher proportion than those who said they did not expect their activity to change. Among those who indicated that they "probably will not" and "definitely will not" adopt mobile banking, 15 percent and 2 percent, respectively, had adopted mobile banking in 2014.
In total, 11 percent of those who reported that they were not mobile banking users in 2013 reported being mobile banking users in 2014.11 However, 14 percent of those who were mobile banking users in 2013 reported that they had not used mobile banking in 2014.12 Among panel respondents overall, mobile banking usage increased from 33 percent of mobile phone users with bank accounts in 2013 to 35 percent in 2014.
For the group of respondents in the 2013 survey who believed they "definitely" or "probably" would use mobile banking in the coming year, the most notable difference between those who actually did adopt mobile banking by the 2014 survey and those who did not was that the adopters were more likely to own a smartphone. Of this likely-to-adopt group, 42 percent with smartphones in 2014 used mobile banking, while 3 percent with feature phones used mobile banking. In both the panel and cross-sectional data, smartphone users were more likely to engage in mobile banking than non-smartphone users.
In every year of the survey, older consumers have consistently been less likely to use mobile banking than have younger consumers (table 3). For those with a mobile phone and a bank account, results from the 2014 survey indicate that mobile banking use is 60 percent for those in the 18-to-29 age range and 54 percent for those in the 30-to-44 age group. By comparison, only 13 percent of individuals ages 60 or older reported having used mobile banking. Usage has generally increased from year to year for all age groups.
Table 3. Use of mobile banking in past 12 months by age
Percent, except as noted
| Age group | 2011 | 2012 | 2013 | 2014 |
|---|---|---|---|---|
| 18-29 | 45 | 54 | 63 | 60 |
| 30-44 | 29 | 37 | 43 | 54 |
| 45-59 | 12 | 21 | 25 | 32 |
| 60+ | 5 | 10 | 9 | 13 |
| Total | 22 | 29 | 33 | 39 |
| Number of respondents | 1,859 | 2,180 | 2,187 | 2,437 |
Note: Percentages are of those in each group who have a mobile phone and a bank account.
Consistent with the data from previous surveys, minorities continue to be more likely to use mobile banking than non-Hispanic whites. In particular, Hispanic mobile phone users with bank accounts show a higher rate of use of mobile banking (53 percent) relative to mobile phone users with bank accounts overall (39 percent) (table 4).
Table 4. Use of mobile banking in the past 12 months by race/ethnicity
Percent, except as noted
| Race/ethnicity | 2011 | 2012 | 2013 | 2014 |
|---|---|---|---|---|
| White, non-Hispanic | 19 | 26 | 30 | 34 |
| Black, non-Hispanic | 35 | 39 | 42 | 43 |
| Other, non-Hispanic | 23 | 31 | 35 | 48 |
| Hispanic | 29 | 36 | 45 | 53 |
| 2+ races, non-Hispanic | 21 | 36 | 31 | 41 |
| Total | 22 | 29 | 33 | 39 |
| Number of respondents | 1,859 | 2,180 | 2,187 | 2,437 |
Note: Percentages are of those in each group who have a mobile phone and a bank account.
Among those with a mobile phone and bank account, mobile banking use is more common for those with higher levels of education. Usage for those with a college degree or some college (44 percent) is greater than for those with a high school degree or less (29 percent). In addition, mobile banking usage for those mobile phone users with bank accounts with household incomes of $40,000 and above (41 percent) is greater than for those with incomes below $40,000 (34 percent).
Common Mobile Banking Activities
Among those who reported using mobile banking in 2014, the most common mobile banking activity was checking financial account balances or transaction inquiries, with 94 percent of mobile banking users having performed this function in the 12 months prior to the survey (figure 3). This was followed by transferring money between accounts, performed by 61 percent of users. In addition, 57 percent of mobile banking users received an alert from their financial institution through a text message, push notification, or e-mail. Depositing a check to an account electronically using a mobile phone camera (known as remote deposit capture) and making an online bill payment from a bank account using a mobile phone were the next most common activities (done by 51 percent and 48 percent of mobile banking users, respectively). Mobile banking users appear to be using mobile applications to conduct their banking transactions, as 71 percent of mobile banking users have installed their bank's application on their phones.
Among all mobile banking users, the frequency of mobile banking use has increased slightly over the past year. The median reported usage increased from four times per month in 2013 to five times per month in 2014. Median usage for those with bank accounts who reported using mobile banking in 2011 and 2012 was also five times per month.
Among mobile bankers, there is variation in how frequently people use mobile banking services, and what types of activities they engage in. A relatively small share of mobile bankers (6 percent) indicated that they had used mobile banking in the previous year but had not used mobile banking in the previous month. These low-intensity users have a lower likelihood of engaging in all types of mobile banking activities, relative to mobile banking users overall. Like all mobile banking users, the most common task for low-intensity users is checking account balances or recent transactions (84 percent). Forty-three percent of the low-intensity users have downloaded their bank's mobile banking app--a sizeable share, but lower than the 71 percent of all mobile banking users who have done so. A greater proportion of low-intensity mobile banking users are non-Hispanic white (78 percent) compared to all mobile banking users (62 percent). Further, a greater proportion of low-intensity mobile banking users are ages 45 or older (49 percent), relative to all mobile banking users (31 percent).
In contrast, high-intensity users--defined here as mobile banking users who have conducted mobile banking tasks more than 10 times during the month prior to the 2014 survey--tend to conduct all mobile banking tasks at the same or higher rates than the larger group.13 In particular, high-intensity users reported making bill payments using their bank's online banking website or banking app and transferring money between their own accounts at higher rates than all mobile banking users. Overall, high-intensity users are demographically similar to the larger group of mobile banking users but include slightly greater shares of younger and black or Hispanic mobile banking users.
Figure 3. Using your mobile phone, have you done each of these in the past 12 months? (Among mobile banking users)
Note: The number of respondents who were mobile banking users was 829.
Reasons for Using--or Not Using--Mobile Banking
Convenience continues to be the most common reason consumers give for adopting mobile banking. Indeed, 35 percent of consumers indicated that the convenience was the main reason they started using mobile banking. Thirty-three percent of consumers said getting a smartphone was the main reason for using mobile banking. A further 20 percent of consumers indicated that the timing of their adoption of mobile banking was driven by their bank starting to offer the service.
Among those consumers with mobile phones and bank accounts who do not currently use mobile banking, several reasons for not using the service predominated--namely, they believed that their banking needs were being met without mobile banking (86 percent), they did not see any reason to use mobile banking (73 percent), and they were concerned about security (62 percent) (figure 4). The small size of the mobile phone screen was cited by 39 percent of consumers as the reason they do not use mobile banking. This was followed by a lack of trust in the technology (34 percent) and not having a smartphone (32 percent) as reasons for not using mobile banking. Less commonly cited reasons included the difficulty associated with using mobile banking (20 percent) and not doing the banking in the household (12 percent). The incidence of reasons for not using mobile banking was generally consistent between the 2013 and 2014 surveys. However, in the 2014 survey, concerns about the security of mobile banking decreased from 69 percent in 2013. Also, fewer respondents reported that the small size of the mobile phone screen (44 percent in 2013) and not having a smartphone (44 percent in 2013) were reasons why they had not used mobile banking.
Consumers who expressed concerns about the security of mobile banking were asked to specify what aspect was of greatest concern (figure 5). Some reported fears of data interception (22 percent), phone "hacking" (17 percent), and lost or stolen phones (9 percent). While additional specific concerns were noted by small numbers of respondents, the most common response was that they were concerned with all of those security risks occurring (43 percent).
When consumers who do not use mobile banking were asked what mobile banking activities they would be interested in performing if their concerns were addressed, their responses largely mirrored those of current users. Checking financial account balances or recent transactions was the most commonly cited (32 percent), followed by downloading their bank's mobile banking app (21 percent), transferring money between accounts (20 percent), receiving alerts from their bank (19 percent), locating the closest in-network ATM or branch (18 percent), depositing checks electronically (17 percent), and making bill payments (15 percent). However, 59 percent of those who do not use mobile banking indicated that they had no interest in performing any mobile banking activities even if their concerns were addressed.
Mobile Payments
In this Section:
For purposes of this survey, mobile payments are defined as "purchases, bill payments, charitable donations, payments to another person, or any other payments made using a mobile phone. You can do this either by accessing a web page through the web browser on your mobile device, by sending a text message (SMS), or by using a downloadable app on your mobile device. The amount of the payment may be applied to your phone bill (for example, Red Cross text message donation), charged to your credit card, deducted from a prepaid card, or withdrawn directly from your bank account."
Adoption Rates
Mobile payments continue to be less common than mobile banking. Based on the responses to the broad definition of mobile payments listed above, 22 percent of those with access to a mobile phone reported that they made a mobile payment in the 12 months prior to the survey, up from 17 percent in 2013, 15 percent in 2012, and 12 percent in 2011. Rates of mobile payment usage are somewhat higher among smartphone users. The share of smartphone users who reported having made a mobile payment in the previous 12 months increased to 28 percent, up from 24 percent in 2013 and 2012, and 23 percent in 2011.
Of current mobile payment users, 16 percent had started using mobile payments in the prior six months, while 13 percent began using mobile payments six to twelve months prior to the survey. A further 21 percent reported that they started using mobile payments in the prior one to two years, and 26 percent reported that they began using mobile payments more than two years prior to the survey. Twenty-two percent of users are unable to recall when they began using mobile payments.
Younger consumers are more likely to make mobile payments (table 5). Of those with a mobile phone in 2014, 34 percent of individuals ages 18 to 29 and 31 percent of individuals ages 30 to 44 had made mobile payments. By comparison, only 7 percent of those ages 60 or over reported making mobile payments. This pattern of use by age has been evident across all four years of the survey.
Table 5. Use of mobile payments in the past 12 months by age
Percent, except as noted
| Age group | 2011 | 2012 | 2013 | 2014 |
|---|---|---|---|---|
| 18-29 | 20 | 26 | 28 | 34 |
| 30-44 | 16 | 18 | 21 | 31 |
| 45-59 | 8 | 9 | 13 | 16 |
| 60+ | 5 | 8 | 7 | 7 |
| Total | 12 | 15 | 17 | 22 |
| Number of respondents | 2,002 | 2,291 | 2,341 | 2,603 |
Note: Percentages are of those in each group who have a mobile phone.
Table 6. Use of mobile payments in the past 12 months by race/ethnicity
Percent, except as noted
| Race/ethnicity | 2011 | 2012 | 2013 | 2014 |
|---|---|---|---|---|
| White, non-Hispanic | 10 | 13 | 12 | 17 |
| Black, non-Hispanic | 14 | 18 | 34 | 34 |
| Other, non-Hispanic | 15 | 17 | 16 | 24 |
| Hispanic | 20 | 18 | 26 | 32 |
| 2+ races, non-Hispanic | 9 | 13 | 31 | 23 |
| Total | 12 | 15 | 17 | 22 |
| Number of respondents | 2,002 | 2,291 | 2,341 | 2,603 |
Note: Percentages are of those in each group who have a mobile phone.
Among those owning a mobile phone, minorities are more likely to make mobile payments (table 6). In 2014, 34 percent of non-Hispanic blacks with mobile phones and 32 percent of Hispanics with mobile phones had made mobile payments, while only 17 percent of non-Hispanic whites reported making mobile payments. The pattern of minorities making mobile payments at a higher rate than white, non-Hispanic consumers has persisted over time.
There is no clear relationship between mobile payment usage and income or education level among those who own a mobile phone.
Common Mobile Payment Activities
Focusing only on those smartphone owners who reported that they had made a mobile payment in the prior 12 months, the most common mobile payment activity was paying bills (68 percent), followed by making online or in-app purchases (54 percent). The next most common activities reported by mobile payment users were paying for a product or service at a store (39 percent) and transferring money directly to another person in the United States (36 percent). Receiving money from another person using a mobile phone (31 percent) and using an app to receive loyalty or reward points (30 percent) were also relatively common activities for mobile payment users with smartphones. Less common activities were paying for parking, a taxi, or public transit using a mobile phone (16 percent), making a payment by text message (11 percent), and sending a remittance overseas (9 percent). (See box 3 for a research note on measuring the use of mobile payments and mobile banking.)
Although using a mobile phone to pay for a retail purchase at the point-of-sale (POS) is less common than paying bills or making an online or in-app purchase, it is becoming less rare of an occurrence. Developments in technology, the entrance of new market participants, and increased familiarity with mobile payments may be contributing to this trend. As noted above, in 2014, 39 percent of all mobile payments users with smartphones made POS purchases with their mobile phone in the 12 months prior to the survey--a figure in line with the 39 percent who reported such payments in 2013. However, among those POS users, less than half (41 percent) had made a POS payment in the preceding month, and less than a quarter had made more than two such payments.
Scanning a QR code displayed on a mobile phone is the most common method that consumers use to make mobile payments at the point of sale, used by 31 percent of those mobile payment users with smartphones who had made mobile POS payments.14 While this remains the most common POS mobile payment, it is a decrease from 39 percent a year ago. The next most common POS methods were making a payment using a mobile app that does not require scanning a barcode or tapping their device (22 percent), and making a payment by waving or tapping their mobile phone at the POS terminal (14 percent).15
Mobile payments are most commonly funded using debit cards (55 percent), credit cards (51 percent), directly from a bank account (41 percent), or from an account at a non-financial institution such as PayPal (15 percent). Only 8 percent of mobile payment users reported that they used a prepaid debit card, and 4 percent had the charge directly applied to their phone bill. The type of payment used to fund the mobile purchase has implications for the consumer protections that the payer is afforded on the transaction, as different payment sources are covered by different consumer regulations and regulatory agencies.16
Among all mobile payments users, the median reported frequency of using mobile payments was two times in the month prior to the survey. As with mobile banking, there is variation among mobile payments users in how frequently they use the service and in types of activities. Twenty-seven percent of mobile payments users reported they had used mobile payments in the past 12 months but not in the month prior to the survey. Like the overall group of mobile payments users, the most common mobile payment activity reported by these low-intensity users was paying bills (31 percent).
Eighteen percent of mobile payments users reported that they had used mobile payments more than five times in the month prior to the survey. Compared to all mobile payment users, these high-intensity mobile payment users had higher rates of engaging in all mobile payments activities and tended to engage in a few mobile payment activities at much higher rates.17 High-intensity users more frequently made an online or in-app purchase, paid their bills online through a mobile web browser or app, paid for a product or service at a store, and transferred money directly to another person's bank or other financial account.
Reasons for Using--or Not Using--Mobile Payments
Getting a smartphone is the most common reason given by consumers who have newly adopted mobile payment activity (34 percent). Convenience is the second-most common reason people started using mobile payments (29 percent). The ability to make mobile payments becoming available to them was cited by 16 percent of users, while 9 percent indicated that they began using mobile payments because they became comfortable with the security.
Among those who do not use mobile payments, the main reason they have not adopted the technology is that they prefer to use other means of making payments: 75 percent reported that it is easier to pay with other methods. Fifty-nine percent did not see a benefit from using mobile payments; the same proportion cited security concerns (figure 6). The incidence of reasons for not using mobile payments was generally consistent between the 2013 and 2014 surveys. However, in the 2014 survey, concerns about the security of mobile payments decreased from 63 percent in 2013. Also, fewer respondents reported that not having the necessary features on their phone (46 percent in 2013), not understanding mobile payment options (37 percent in 2013), and the places they shopped not accepting mobile payments (27 percent in 2013) were reasons why they had not used mobile payments.
For those worried about the security of mobile payments, the concerns roughly mirror those about mobile banking. The main fears associated with mobile payments include the interception of payment information (21 percent), phone "hacking" (13 percent), lost or stolen phones (10 percent), misuse of personal information (3 percent), and malware or viruses installed on their phone (2 percent). As with mobile banking, the most common response was that respondents were concerned with all of those security risks (51 percent).
When consumers who do not use mobile payments were asked to indicate all the mobile payment activities they would have an interest in using if their concerns were addressed, 65 percent indicated that they simply had no interest in using mobile payments even if their concerns were addressed. This is similar to the responses regarding mobile banking, indicating that some consumers simply have no interest in utilizing the new technology under any circumstances. Of the potential activities of interest to others, receiving/using coupons on their phone was the most commonly cited (20 percent), followed by using a mobile phone to pay for purchases at a store (18 percent) (figure 7).
When those with a smartphone who did not report making POS payments were asked if they plan to use their mobile phone to make a payment in a store in the next 12 months, 5 percent said they "definitely will" and 16 percent said they "probably will." The majority of smartphone users said that they "probably will not" (44 percent) or "definitely will not" (35 percent) use their phone to make an in-store payment.
Figure 7. Activities you would be interested in doing if concerns about mobile payments were addressed
Box 3. Research Note: Measuring the Use of Mobile Payments and Mobile Banking
Over the four years that the Federal Reserve has been conducting this survey, respondents have consistently been asked to gauge whether they had used mobile banking or mobile payments in the preceding 12 months based on general descriptions of these mobile financial services. Responses to those questions provide a baseline for how usage has changed over the course of the survey. However, the number or respondents reporting that they use mobile banking and mobile payments based on the general descriptions is lower than the number reporting that they engage in specific banking or payment activities. This indicates that actual usage may be somewhat higher than the general questions would indicate, and may indicate that more specific questions may prompt respondents to remember details about their usage in a different way. These results also illustrate the challenges for both researchers and respondents in how to categorize mobile banking and payment activities as technologies continue to emerge and evolve and as consumers move from exploration to adoption of new ways of using their smartphones.
For example, mobile payment users were identified by a general question about whether they have engaged in any mobile payments activities over the past 12 months.1 In addition, mobile phone users were asked whether they had used their phone for particular mobile payments tasks. Some respondents who answered "no" to the mobile payments question indicated they have done one or more of these mobile payments tasks, implying the share of people making mobile payments may be higher than the measure of mobile payments users based on the general definition. In the 2014 survey, 28 percent of smartphone owners were identified as mobile payments users based on their response to the general question. By comparison, 47 percent of smartphone owners reported completing at least one mobile payments task, regardless of their answer to the general question about mobile payments.2
Figure A shows the share of respondents with a smartphone who reported completing mobile payments tasks, grouped by whether they indicated they used mobile payments. The lighter bars represent respondents who said they had used a particular form of mobile payment but had answered "no" to the more general question about whether they had used any form of mobile payment.
A similar pattern is evident with the questions on mobile banking. Thirty-nine percent of those with mobile phones and bank accounts reported using mobile banking in the prior 12 months based on the general question. By comparison, 50 percent of respondents with mobile phones and bank accounts reported completing one or more specific mobile banking tasks, regardless of their answer to the general question about mobile banking.
These results illustrate that technology adoption can be viewed as a continuum, both in terms of the types and frequency of activities involved and in terms of how respondents view and report their activities. The majority of respondents were consistent in providing responses indicating they were either users or non-users of these services in their answers to both the general questions and the specific task questions, although there was less consistency in the responses for mobile payments use than for mobile banking use.3 Those respondents who provided seemingly anomalous answers did report less frequent use of the specific services cited than respondents who said "yes" to the general question as well as the more specific ones. For this reason, it is possible that some consumers are "dabblers" in mobile services but do not consider themselves more general users of the technology. It is also possible that different questions simply prompted different responses or that some respondents misremembered and answered incorrectly.
1. For the explanation of mobile payments provided to respondents, see page 14. Return to text
2. For all those with mobile phones, including both feature phones and smartphones, 22 percent reported making mobile payments based on the general definition and 36 percent reported completing at least one mobile payments task, regardless of their answer to the general question about mobile payments. Return to text
3. Overall, 73 percent of smartphone owners provided consistent responses on the mobile payments questions: 25 percent self-identified as mobile payments users in response to the general question and also reported at least one mobile payments task, while 49 percent self-identified as not using mobile payments based on the general question and reported no mobile payments tasks. Overall, 86 percent of those with mobile phones and bank accounts provided consistent responses to the mobile banking questions: 38 percent self-identified as mobile banking users in response to the general question and reported at least one mobile banking task, while 48 percent self-identified as not using mobile banking based on the general question and reported no mobile banking tasks. Return to text
Mobile Security
One of the main reservations consumers have with adopting mobile banking and mobile payments is concern about the security of the technology. Despite the increased prevalence of mobile banking and mobile payments, a significant share of consumers believe the technology to be unsafe or do not know how safe it is (see box 4 for a discussion of industry developments in securing mobile payments). Among all mobile phone users, 25 percent believed that people's personal information is "somewhat unsafe" when using mobile banking and 19 percent believed that it is "very unsafe." A further 15 percent of mobile phone users simply did not know how safe it is to use mobile banking. Only 7 percent said it is "very safe" to use mobile banking (table 7).
Table 7. How safe do you believe people's personal information is when they use mobile banking?
Percent, except as noted
| 2013 | 2014 | |
|---|---|---|
| Very safe | 6 | 7 |
| Somewhat safe | 32 | 34 |
| Somewhat unsafe | 25 | 25 |
| Very unsafe | 18 | 19 |
| Don't know | 17 | 15 |
| Number of respondents | 2,341 | 2,603 |
When mobile phone users were asked how safe they believe people's personal financial information is when they use a mobile phone to pay for a purchase at a store, 28 percent said it was "somewhat unsafe" and 21 percent said it was "very unsafe." As with mobile banking, there exists significant uncertainty about the security of POS mobile payments, with 15 percent saying they "don't know" whether people's personal financial information is safe when making such a payment. The share of consumers who said that POS mobile payments were "very safe" was only 5 percent, while 30 percent said that it was "somewhat safe" (table 8).
Table 8. How safe do you believe people's personal information is when they use a mobile phone to pay for a purchase at a store?
Percent, except as noted
| 2013 | 2014 | |
|---|---|---|
| Very safe | 4 | 5 |
| Somewhat safe | 30 | 30 |
| Somewhat unsafe | 27 | 28 |
| Very unsafe | 19 | 21 |
| Don't know | 18 | 15 |
| Number of respondents | 2,341 | 2,603 |
In addition, there is a dichotomy in perceived security among users and non-users of mobile banking services. Among mobile phone owners who do not use mobile banking, only 3 percent rated the overall security of mobile banking as "very safe," while 24 percent rated it "somewhat safe." Nineteen percent of non-users indicated that they "don't know" how safe it is to use mobile banking. Mobile banking users, however, rated mobile banking as "very safe" (14 percent) or "somewhat safe" (53 percent) in maintaining their personal information. Only 5 percent of mobile banking users indicated that they "don't know" how safe mobile banking is at protecting their personal information (figure 8).
Note: The number of respondents was 829 mobile banking users and 1,584 non-users of mobile banking.
Box 4. Industry Developments in Securing Mobile Payments
Interest and adoption of mobile payment services may be poised for growth as a number of developments in technology and security take hold in the mobile financial marketplace. In this and preceding surveys, concerns about the security of mobile payment technologies are frequently cited by non-users as reasons for not using mobile payments. Consumers have also cited, to a lesser extent, the lack of necessary features on their phone and the lack of acceptance of mobile payments at places where they shop as reasons for not using mobile payments.1 Recent efforts to enhance the security of mobile payment transactions and to apply emerging technologies to a payments context could shape consumers' attitudes about and use of mobile payments in the coming years.
This survey's results confirm that security concerns are on the minds of many consumers. The payments industry is taking steps to enhance transaction security at various points in the process, including by working toward conversion to EMV (named after its founders Europay, MasterCard, and Visa), a standard payment specification for authorizing credit and debit chip-card transactions. (This technology is also referred to as "chip and pin" or "chip and signature.") In order to accept in-person EMV transactions, merchants install EMV-compliant checkout terminals in their stores, and card issuers provide consumers with new cards containing microchips that meet the EMV standard. To encourage merchants and card issuers to adopt this technology, the card networks have set a deadline of October 2015, after which they intend to shift liability for fraudulent transactions to the party that is not EMV-compliant. While not a mobile-specific development, EMV conversion ought to decrease the forms of certain types of payment fraud, and could influence consumer preferences over time.
Increasingly, smartphone manufacturers are also equipping devices with hardware and software to provide more payment options--such as Near Field Communications (NFC) antennas to interact with in-store check-out NFC-enabled terminals--and security features--such as fingerprint authentication technology. Many new EMV terminals are likely to also support NFC technology. Security-minded consumers may have more confidence making a mobile payment from a device that uses multiple layers of security, complies with EMV standards, and/or offers new or additional features. While these efforts are largely undertaken by the private sector, an October 2014 Executive Order establishing EMV as the standard for federal government payments may reinforce private actions.2
The changes in the marketplace may ultimately better protect customers' data by reducing the amount of data accessed and stored by merchants. New payment card technology that replaces the real card number with a substitute value (also known as a token) may also make it more difficult to use card information--on mobile devices or in other forms--fraudulently. If successful, these efforts could improve consumer confidence in newer payments technology in general, possibly affecting the related use of mobile payments.
1. In the 2014 survey, 37 percent of non-mobile payments users cited the lack of necessary features on their phone and 23 percent cited the lack of acceptance of mobile payments at places where they shop as reasons for not using mobile payments. Return to text
2. See www.whitehouse.gov/the-press-office/2014/10/17/fact-sheet-safeguarding-consumers-financial-security 
. Return to text
References
8. The definition of online banking changed slightly between the 2012 and 2013 surveys. For the 2011 and 2012 surveys the definition was "Online banking involves checking your account balance and recent transactions, transferring money, paying bills, or conducting other related transactions with your bank or credit card company using the Internet." For the 2013 and 2014 surveys, the definition was "Online banking involves checking your account balance and recent transactions, transferring money, paying bills, or conducting other related transactions with your bank or credit union using the Internet." Return to text
9. The relative prevalence of channel usage in the Board's Mobile Survey is similar to results from the 2013 FDIC Survey of Unbanked and Underbanked Households. Of the households with bank accounts that reported accessing their accounts in the previous 12 months, 79 percent used a bank teller; 70 percent used an ATM/kiosk; 55 percent used online banking; 26 percent used telephone banking; and 23 percent used mobile banking. Comparing these FDIC figures to the results from the 2013 Mobile Survey, the relative ranking of the channels is the same across the two surveys, but the incidence of use is higher in the Mobile Survey for all channels. The incidence of online banking and of households with Internet access are notably higher in the 2013 Mobile Survey than in the FDIC survey. This may be due to differences in the survey methodology. The FDIC survey is conducted by phone and in person. The Mobile Survey is conducted via an online panel. Return to text
10. The definition of mobile banking in the 2011 and 2012 surveys differed slightly from the definition above. In the earlier surveys, mobile banking was defined as using "a mobile phone to access your bank account, credit card account, or other financial account. This can be done either by accessing your bank's web page through the web browser on your mobile phone, via text messaging, or by using an application downloaded to your mobile phone." Return to text
11. This group represents 6 percent of panel respondents who were mobile phone users in both years. Return to text
12. This group represents 4 percent of panel respondents who were mobile phone users in both years. Return to text
13. For the purposes of this report, "high-intensity" users are identified as those respondents who have used mobile banking within the year prior to the 2014 survey and have used mobile banking more frequently than 75 percent of all mobile banking users, which corresponds to a frequency greater than 10 times in the month prior to the 2014 survey. Based on this definition, high-intensity users represent 22 percent of mobile banking users in the 2014 survey. Return to text
14. A Quick Response (QR) code is a type of barcode that quickly transfers information to a device when scanned. Some mobile payment applications use QR codes displayed on the user's smartphone screen to communicate the payment credentials to merchants when scanned at the POS. Respondents who answered that, using their mobile phone, they had "Paid for a product or service at a store (including at gas pumps and for restaurant meals)" were asked a follow up question (question 39) asking about ways of paying in a store. The follow up question listed four ways of paying with a phone, including "Other (Please Specify)." However, 58 percent of those who were asked this follow up question refused the question or did not select any of these four options. Return to text
15. The most commonly reported mobile payments services used in the last year were PayPal (43 percent), Starbucks (11 percent), Google Wallet (9 percent), and Apple Pay (5 percent). Forty-three percent of those who were asked the question about mobile payment services (question 42) refused to provide an answer. This question was asked of all those with smartphones who had made a mobile payment in the last year. Because the answer choices did not include options such as "Other" or "Do not know," refusing to answer would have been a likely response for those who have not used these services. Return to text
16. For further details on how existing consumer regulations relate to the various methods for making mobile payments, see Stephanie Martin (2012), "Statement before the Committee on Financial Services Subcommittee on Financial Institutions and Consumer Credit U.S. House of Representatives" (Washington: Federal Reserve Board, June), www.federalreserve.gov/newsevents/testimony/martin20120629a.pdf. Return to text
17. For the purposes of this report, "high-intensity" mobile payments users are identified as those respondents who have used mobile payments within the year prior to the 2014 survey and have used mobile payments more frequently than 75 percent of all mobile payments users, which corresponds to a frequency greater than five times in the month prior to the 2014 survey. Return to text