In-Store and In-App: Managing Mobile Payment Expectations - eMarketer
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In-Store and In-App: Managing Mobile Payment Expectations

January 26, 2017 | Retail & Ecommerce


Seamus Smith
Managing Director
Sage Pay

Consumers in the UK are increasingly turning to their mobile devices to make transactions, according to Seamus Smith, managing director at Sage Pay, a UK-based payment gateway provider. eMarketer’s Sean Creamer spoke with Smith about how consumers are making mobile purchases in person and in-app.

eMarketer: What is the size of the UK mobile payment market?

Seamus Smith: Well, one thing for sure is it’s changing and moving rapidly. We know that about 76% of UK adults own a smartphone and around 70% of those have used them for some form of payment in the past 12 months, but we know that mobile payment growth rates are extreme at the moment.

eMarketer: Considering how many adult users there are, how has this affected the growth of mobile payments in the UK?

Smith: In the past six months, evidence from our recent survey of consumers and businesses shows there’s been a 68% increase in the rise of mobile payments. We estimate that of overall online commerce, nearly half of that is being managed through some form of mobile device, and of course that includes tablets as well as mobile phones.

“People are very influenced by brand loyalty to the device, and then exploring the payment options available via that device.”

eMarketer: How are users choosing their mobile payment platform?

Smith: People are very influenced by brand loyalty to the device, and then exploring the payment options available via that device. Android is ... the largest smartphone platform, so that will naturally attract a greater percentage. iOS is another leading platform.

eMarketer: What types of purchases are being made via mobile devices?

Smith: We see two distinct patterns of behavior. Particularly in the UK, for transactions £30 [$40.5] or less in value, those are transactions that can be done through a contactless terminal and via a mobile device.

However, for larger-ticket items there are interesting dynamics emerging in the world of mobile commerce. For example, webrooming—where people are browsing online but are going to buy in a store—is a very common ecommerce phenomenon.

“In-app purchasing is not as widely spread yet as it probably will be in the next few years.”

And then there’s showrooming, which is the opposite of that—people will browse in-store, but then go and buy online. And certainly for larger-ticket items, we’re seeing less use of mobile because people want to see firsthand any goods or services that they might be buying.

eMarketer: Have you seen mobile payments being used for in-app purchases?

Smith: The in-app dynamic is interesting and remains an area of development for the players in the industry, because in-app purchasing is not as widely spread yet as it probably will be in the next few years.

eMarketer: What are the benefits that brands and payment processors need to convince consumers about?

Smith: There are three dynamics we see very clearly. There is the quick and instant nature of being able to make a payment, and there is also a frictionless user experience in making that payment.

However, the third element is security, and security remains a preoccupation of consumers based on the surveys that we do. Seventy percent of consumers recently told us they have concerns about making mobile online payments, and these concerns are in the minds of consumers when electing to pay in a mobile or online environment.

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