What American consumers expect of online merchants and other services is constantly in flux. Yet one transition remains very clear: they want the ability to pay for more products on their mobile phones, and they’ll use such a service whenever possible.
More Americans want to begin controlling the entirety of their finances through their mobile phones and through other nontraditional “channels,” according to a report released by Western Union. ” When asked whether they planned on paying some of their monthly bills via a mobile phone or tablet sometime during the next six months, 15 percent of respondents said yes. Another 13 percent noted that they’d rather handle their credit card billing through a branded application or through a text message, in reference to the same time frame.
“The Western Union Bill Payments Money Mindset Index points to increasingly tech-savvy consumers choosing to add mobile options to their bill payment tool kit,” said David Shapiro, senior vice president of payments at Western Union. “Another key take-away for the business community is the importance of meeting consumer demand for convenience, flexibility, and choice.”
Separating different modes of bill payments into channels – such as desktop computer, mobile phone, in-person banking, and others – the firm found that many consumers now like to cross over between different methods, and credit card mobile processing is one of them. The report noted that 36 percent of respondents use three or more channels to pay for the entirety of their monthly bills. It also found that 27 percent of those “multi-channel” payers used a mobile phone for at least one bill per month, illustrating the increased need for mobile payment processing capabilities.
It’s also clear that customers want a multitude of electronic options at their grasp for the sake of making their payments. The poll found that 38 percent of respondents used three or more payment methods – such as credit cards and debit cards – to pay for their monthly expenditures.
The younger consumers get, the more options they demand, as well. The study found that 41 percent of respondents age 18-34 use three or more channels for bill payment. It also noted that 51 percent of respondents from that age group paid their monthly debts through a biller’s website, as well as that 39 percent pay one of their bills through a bank or credit union website, illustrating the need for wide ranging payment processing options from financial institutions and retailers alike.
A chance at increased efficiency – and lower costs
For banks, the opportunity to cut costs through more effective forms of payment could far outweigh the expenditures that come with installing new modes of payment processing. A recent study for Javelin argued that optimizing business offerings toward the concept of mobile banking could eventually save individual branches large amounts in operating costs.
“Despite mobile bankers’ lower preference for in-person transacting; there are still specific financial behaviors where mobile transacting is overlooked in favor of less-efficient, more expensive channels,” said Mary Monahan, the research director at the mobile division at Javelin. “By switching just one mobile banker’s in-person deposit to mobile per month, the average institution saves almost $50 per annum per mobile banking customer, adding up to $1.5 billion in cost savings for the industry.”
The study noted that since 2010, in-person branch visits have dropped dramatically, down by 10 percent. However, mobile banking rates have increased at roughly the same amount during the same timeframe. Javelin’s report notes that for the average financial institution, an in-person transaction costs approximately $4.25, while a mobile transaction can cost as little as $0.10. For banks and retailers everywhere, the culture’s transition to mobile modes of payment could mean big savings.Back To Blog