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Who will lead in mobile payments? Apple, Google, Facebook, your bank?

March 8th, 2012

 With almost $200 billion in combined 2011 revenues, Apple, Google, Facebook, and Amazon are well positioned to take the lead in mobile payments landscape.

However, the top mobile payments spot is still up for grabs, as consumers trust PayPal, Visa, and their own banks for making financial transactions compared to mobile networks, social media, and online retailers.

“Companies will need to understand how their brand resonates with consumers in the three key areas of trust, innovation and privacy. Brands must partner with companies to achieve complementary strengths and widespread adoption in mobile payments.”

The report reveals the shift in consumer mobile behaviors over the past two years and spotlights emerging market opportunities for mobile wallets.

Mobile purchases skyrocketed

In 2011, consumers’ mobile purchases of physical goods skyrocketed to 41% from 14% in 2009, while those of ringtones, which once dominated the market, decreased significantly. This shift from “nice to have” to “needs” indicates how consumers are beginning to find more value in purchasing via mobile devices.

Using its TIP (Trust-Innovation-Privacy) Model, Javelin scored brand effects of social media, mobile networks, and financial institutions (FIs) on trust, innovation, and privacy.

While PayPal came closest to reaching “Gold Zone”, the high trust-high innovation-high privacy position, no brand placed in the coveted spot.

However, despite overall low scores in all three categories, FIs scored extremely well among their own customers, receiving the highest rankings for trust in security, protecting private information, and even innovation. Facebook and Sprint were the least trusted brands for financial transacting.

“Although consumers rate Apple as the greatest innovator, no brand will reach the Gold Zone without the right alliance,” said Mary Monahan, executive vice president and research director, Mobile at Javelin. “Companies will need to understand how their brand resonates with consumers in the three key areas of trust, innovation and privacy. Brands must partner with companies to achieve complementary strengths and widespread adoption in mobile payments.”

“Don’t count out banks, which are well respected in their geographic markets,” said Jim Van Dyke, president, Javelin. “Our data shows that banks’ own consumers ranked them higher on trust and privacy than payment providers, mobile network carriers, other banks, and the Gang of Four. FIs are viable partners for these mobile payment vendors.”

Javelin’s Gang of Four (and Possibly Five) Apple, Google, Facebook, Amazon – and PayPal report analyzes consumer perceptions of mobile payments players of trust, innovation, and privacy and recommends strategies for social media and mobile companies and FIs to succeed in the mobile purchasing market. The report is based on survey data collected online from more than 5,800 consumers.

Selected Key Report Findings

  • Mobile technology usage is on the rise, paving the way for increased mobile purchasing. By 2016, 72% of adults will use smartphones, while 40% of mobile phone owners will use tablets.
  • Consumers’ mobile purchases of physical goods skyrocketed to 41% from 14% in 2009, while purchasing of ringtones significantly decreased.
  • Consumers with primary banking relationships at FIs gave their own banks the highest trust and privacy scores over Visa, which received top scores among all consumers.

For additional details or to purchase Javelin’s report, click here Gang of Four (and Possibly Five) Apple Google Facebook Amazon – and PayPal: Positioning for Payments in the New Mobile-Social Technology Era

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