1

Consumers: challenges and visions on the future of mobile payments  Smart Phone users: Attitudes towards Mobile Payments

Extract of the presentation

Stefano Carlin – Director of Business TNS Italia

Prepaid Summit Europe 2011 - Milan, 10-11 October 2011

Stefano Carlin – Director of Business TNS Italia

Prepaid Summit Europe 2011 - Milan, 10-11 October 2011

22

AGENDA

Awareness and usage of M-Payment

Future opportunities of Mobile Payments

Attitudes towards Mobile Payment

Research Methodology

|© TNS|© TNS

33

Research Methodology

Italy

Collection method Panel Online (C.A.W.I.)

Sample size600 Smartphone users

18-65 years old

Representativeness National by geographic area

Fieldwork dates 16th-19th September 2011

Main purposes of the survey• To get a picture of the actual awareness

and usage of Mobile payments among consumers

• To understanding future opportunity of mobile banking

• Segmenting Smartphone users toward Mobile Payment attitudes (and mobile/ internet usage)

• Quantifying early adopter and followers

44

M-Payment awareness has reached a high penetration through Smarthphone users (more than 90%):more than 90%): Internet and SMS ways more than App and IVR. Less known the proximity concept.

Only 41%41% of smartphone users have used M-Payments in the last 6 months, and that has mostly been completes via internet connections and SMS. Payments by AppPayments by App are still at a very early stage.

Mobile Top upsMobile Top ups are the most purchased services, followed by services related mobile and entertainment.

Prepaid cards are the main source of charge, due to the fear of fraudfear of fraud

““Non-uNon-users”sers” mainly don’t trust securitydon’t trust security in the device: but the main barrier is still lack of awarenesslack of awareness. A detailed information and communication campaign is required to reassure users.

Services linked to mobile telecoms besides to general payment will have the greater potentiality towards M-Payments.

Key insights

55

Segmentation found out 5 clusters: Enthusiast (20%) - ready to use M-P -and Distrustful (21%)– ready to M-P if reassured about security. These two segments may be considered the “Early adopters”, those who will use M-P as soon as available in all its aspects (by remote, sms, contactless….).

The other two segments, Convenience user (27%) and Conservatives (20%) will be the “Followers” (47%), those who will “join” M-P only when the payments system have been well tested and fine tuned! Only 12% of all Smartphone user are pure pure RejectorsRejectors: they simply don’t want to use M-P because they are “basic” users of mobile and internet

If we consider the continuous growth of Smartphone users in Italy (now 35% of Mobile phone users*), we can assume that mobile payments have reached the “critical mass” of potential user… But now it’s time that providers invest hugely and move more in depth into the market.

Key insights

*ComScore font *ComScore font

6

Awareness and usage of M-Payment

77

Aware but not

user51%

Aware and user

41%

Not aware

8%

D.2 Which of the following payments device do you know?D.3 And which did you use in the last 6 month? Base: Smartphone users

Who is aware and already uses Mobile Payment service?

More than 90% are aware of Mobile Payments, More than 90% are aware of Mobile Payments, but less than half state to have used them in the last 6 but less than half state to have used them in the last 6

monthsmonths

More than 90% are aware of Mobile Payments, More than 90% are aware of Mobile Payments, but less than half state to have used them in the last 6 but less than half state to have used them in the last 6

monthsmonths

Awareness and usage of M-Payment service Awareness and usage of M-Payment service

88

… but not all kind of M-Payments are known and used at the same level…

Internet connection is the main purchasing modality, Internet connection is the main purchasing modality, followed by SMS… payments by apps are still in their followed by SMS… payments by apps are still in their

infancy…infancy…

Internet connection is the main purchasing modality, Internet connection is the main purchasing modality, followed by SMS… payments by apps are still in their followed by SMS… payments by apps are still in their

infancy…infancy…

D.2 Which of the following payments device do you know?D.3 And which did you use in the last 6 month? Base: Smartphone users

awarenessawareness

usageusageSMS

Internet connection

Phone application

Call or IVR

Proximity

SMS

Internet connection

Phone application

Call or IVR

Proximity

Awareness and usage of M-Payment service Awareness and usage of M-Payment service

99

D.4 Which of the following goods and services did you purchase by mobile phone payment?Base: Smartphone users – Multiple answers

Services bought by Mobile in the past 6 monthsServices bought by Mobile in the past 6 months

Mobile top ups are the main purchased services …. Mobile top ups are the main purchased services …. Followed by services related to mobility and Followed by services related to mobility and

entertainmententertainment

Mobile top ups are the main purchased services …. Mobile top ups are the main purchased services …. Followed by services related to mobility and Followed by services related to mobility and

entertainmententertainment

M-P Services are linked to the mobile usage itself

25%15%

12%12%

10%10%10%10%10%9%8%

12%59%

M-P users: 3.8 kind of services purchased in

the last 6 months

M-P users: 3.8 kind of services purchased in

the last 6 months

Mobile top ups

Train/flight tickets

Charity donations

Game downloads

Billing

Mobile ring tones

Parking tickets

Prepaid card top up

Song/movie downloads

Concert/ event tickets

Info/news

Other

None of these

1010

Where are charged the Mobile Payment?D.5 Where did you charge the Mobile payments? Base: Smartphone users of Mobile Payments in the past 6 months - Multiple answers

The “source” of Mobile PaymentsThe “source” of Mobile Payments

Prepaid cards are the main source to confirm the fear Prepaid cards are the main source to confirm the fear of fraud of fraud

Prepaid cards are the main source to confirm the fear Prepaid cards are the main source to confirm the fear of fraud of fraud

38%

31%

31%

25%

PrepaidCard

CurrentAccount

CreditCard

MobileCredit

1111

Barriers towards Mobile payments usageD.6/7bis Why do you tell me you don’t / wouldn’t use mobile payments?Base: Not users of mobile payment - Multiple answers

SecuritySecurity I’m afraid of fraud/ cloning System is not secure It is less secure than cards

I don’t like using mobile phone for payments

It’s too complicated to use Mobile for paymentsDevicesDevices

Other reasons Other reasons I prefer other kind of payments

I loose the control of my expenditures

……..

35%35%... only needs more information to consider using... only needs more information to consider using... only needs more information to consider using... only needs more information to consider usingBut …But …But …But …

50% of the non users don’t trust security and device in some wayof the non users don’t trust security and device in some way 50% of the non users don’t trust security and device in some wayof the non users don’t trust security and device in some way

1212

Future opportunities of Mobile Payments

1313

D.7 Which of the following items would you purchase via mobile phone payment if available in the near future?Base: Smartphone users – Multiple answers

Services linked to mobility have the main appeal besides to Services linked to mobility have the main appeal besides to general payments, but room even for traditional payments as general payments, but room even for traditional payments as

Medical check up, baby sitter fee…Medical check up, baby sitter fee…

Services linked to mobility have the main appeal besides to Services linked to mobility have the main appeal besides to general payments, but room even for traditional payments as general payments, but room even for traditional payments as

Medical check up, baby sitter fee…Medical check up, baby sitter fee…

What they would buy via M-Payments in the next future

WOULD BUY SOMETHING

Parking/motorway/petrol

Train/flight/events tickets

Billings/sanction/fee

Department stores

Taxi

Hotel/Restaurant

Services (Medical Check up, home help/ baby sitter fee…)

WOULD BUY SOMETHING

Parking/motorway/petrol

Train/flight/events tickets

Billings/sanction/fee

Department stores

Taxi

Hotel/Restaurant

Services (Medical Check up, home help/ baby sitter fee…)

14

Attitudes towards Mobile Payment

1515

Attitudes towards M-PaymentsCluster Analysis was applied to the sample (Smatphone users), in order to subdivide them into groups as homogeneous as possible on a member-to-member basis, and as different as possible on a group-to-group basis in terms of attitudes and behavior towards Mobile phone payment in particular and payment (credit / prepaid cards vs cash) in general. Base: total sample = 600 cases

DISTRUSTFUL

21%

CONVENIENCE USERS

27%

REJECTOR

12%

CONSERVATIVES

20%

ENTHUSIAST

20%They are ready to

use any kind of Mobile Payment

Ready to use Mobile Payment only if

reassured about security

They will be ready to use Mobile Payment only after

fine tuning

They’ll never use any kind of Mobile

Payment

They will be the last to use Mobile Payment

1616

Segment description 1/2

EARLY ADOPTERS

ENTHUSIAST (20%) DISTRUSTFUL (21%)

AT

TIT

UD

ES

M-P

Fans of Mobile banking and all kind of purchases without hindrance

Would use cash for micropayments: still have doubts about security. Once reassured, their propensity would be high

MO

BIL

E

ST

AT

US

Smartphone is essential in their life: they can’t do without. No queue, fast buying/ paying

Smartphone is a status symbol and the heart of their social life.

INT

ER

NE

T

They can’t live without the internet The Internet allows for social connection, anytime, anywhere (by mobile). Security (data privacy and protection) are still an issue.

BE

HA

VIO

UR

M-P

P

UR

CH

.

70% bought something via mobile: about 4/5 different services in the last 6 months

48% bought something via mobile: about 4/5 different services in the last 6 months

BA

NK

ING

Mobile Phone purchases are charged mainly on credit cards

Mobile Phone purchases are charged mainly on Prepaid cards

INT

ER

NE

T

AC

T. E-mail

Social networking/Financial/administration E-mail Social networking

SO

CIO

-D

EM

O

Greater concentration in the South Italy

More common among male

The highest concentration in the 35-44 years old class

Segmentation of Smartphone users on the basis of their attitudes towards mobile payments

1717

Segment description 2/2

FOLLOWERS

CONVENIENCE USERS (27%) CONSERVATIVES (20%) REJECTORS (12%)

AT

TIT

UD

ES

M-P

Awareness and “testing” of M-P are the main issues. This segment reflects the attitudes of the average smartphone users

Traditional, they don’t trust M-P very much. And if they had to use M-P, it would be better through prepaid card

No M-P at all! They don’t trust neither device nor security

MO

BIL

E

ST

AT

US

Mobile is a given but not so essential … makes their lives easier…

They are “beginners”: they are starting using all the function of the mobile…

They are basic users: they have a smartphone but they simply use it to call or send SMS, little else.

INT

ER

NE

T Internet has already become part of

their life, it’s a tool to do what they need

Internet it’s a daily tool to be connected with other people (mainly by e-mail) but security is still an “open” issue

Internet is part of their life but only for basic usage and not so intensive

BE

HA

VIO

UR

M-P

P

UR

CH

. Less than 40% bought something via mobile: but less than 3 different services in the last 6 months

Only one out of five has bought something via mobile in the last 6 months

Only 10% have topped up their mobile phone using M-P in the last 6 months

BA

NK

IN

G The purchases via mobile are charged

on mobile credit mainly. They still prefer cash for micropayments

Impossible to think about mobile banking. 16% haven’t a current account

INT

ER

NE

T

AC

T. E-mail

Personal interest E-mail Administration and financial

E-mail Personal interest

SO

CIO

-D

EM

O

Distributed as the average of Smartphone users Greater concentration in the N-E

More common among female

The oldest segment, high concentration over 45 years old

Segmentation of Smartphone users on the basis of their attitudes towards mobile payments

1818

Annex: Sample details

1919

Internet usage frequency

More times a day

1 time per day

5/6 days per week

3/4 days per week

1/2 days per week

Less than once a week

Never

More times a day

1 time per day

5/6 days per week

3/4 days per week

1/2 days per week

Less than once a week

Never

* They are on-line panellists* They are on-line panellists

D.12 How often do you connect to internet……. Base: Smartphone users

By PC*By SMARTPHONE

2020

6191

39 34 29 12 27 50 6338 25

8098 88 82 84

6987 89 95

8155

Daily At least once in past 4 weeks

PC

43 69 32 24 22 9 18 35 42 27 15

6582 70 70 68 54 67

82 77 7043

Daily At least once in past 4 weeks

Smartphone

% of activities via ….% of activities via ….

Internet activity frequencyD.13 How often do you connect to internet to……. Base: Smartphone users

E-mail, Social networks and Personal interest are the E-mail, Social networks and Personal interest are the main activities in both the instruments..main activities in both the instruments..

E-mail, Social networks and Personal interest are the E-mail, Social networks and Personal interest are the main activities in both the instruments..main activities in both the instruments..

2121

Overview of payment tools: ownership and frequency of usage

80%

52%

52%

50%

8%

5%

Debit card

Credit card

Prepaid card

Cheque book

Other tools

Only cash

S.6 What payment tools do you own?S.7 How often do you use these payment tools? Base: Smartphone users

12

11

6

2

12

11

6

2

Monthlytimes average

Monthlytimes average

2222

S.8 Have you any kind of current account?S.10 Which of the following finance goods/services do you own?Base: Smartphone users – Multiple answers

Overview on financial services/products

57%

56%

49%

33%

31%

30%

21%

19%

18%

16%

3%

Online banking

Car Insurance

Deposit account

Loan/Mortgage

House insurance

Life insurance

Found/stocks

Phone banking

Saving bonds

Other product

none

2323

S.8 Have you any kind of current account?S.10 Which of the following finance goods/services do you own?Base: Smartphone users – Multiple answers

Smartphone users profile

44%

3%

30%

29%

25%

13%

27%

20%

23%

30%

56%Man

Female

18-24

25-34

35-44

45-54

55 and more

North West

North East

Center

South

55%

38%

74%

62%

12%

26%

6%

7%

7%

6%

7%PrimarySchool

High SchoolUniverityDegree/

Employed

Full time

Part time

Not working

Studends

Retired

Unemployed

Housewife

24

Thank You

Stefano CarlinDirector of Business – TNS Italia@: stefano.carlin@tnsglobal.com

|© TNS|© TNS