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Board of Governors of the Federal Reserve System
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Consumers and Mobile Financial Services
March 2013


Since the first Federal Reserve Board survey on consumers and mobile financial services conducted in December 2011, the use of mobile financial services among consumers has continued to increase and the range of services offered has continued to expand.1 As part of the Board's ongoing efforts to monitor developments in consumers' usage of and attitudes toward mobile financial services, the Board conducted a second consumer survey in November 2012. This second survey included a random sample of respondents to the previous survey, as well as a new random sample of respondents. The subsample of respondents in both waves of the survey allow for the observation of changes in behavior over the past year among individual people.


Survey Background

In December 2011, the Consumer Research section in the Federal Reserve Board's Division of Consumer and Community Affairs conducted its first survey of consumers' use of mobile financial services (hereafter referred to as the 2011 survey). In late November 2012, the Consumer Research section deployed a slightly revised version of the original survey to a sample composed of both some of the same respondents to the December 2011 survey and new survey respondents (hereafter referred to as the 2012 survey). The second survey was conducted to monitor changes over the past year in the rapidly evolving use of mobile financial services and to provide additional insight into consumers' financial behaviors. Both the original survey instrument and the one administered in the second round of the survey were designed in consultation with a mobile financial services advisory group made up of key Federal Reserve System staff with relevant consumer research backgrounds.

The 2012 survey was again administered by GfK (formerly Knowledge Networks), an online consumer research company, on behalf of the Board. The survey was conducted using a sample of adults ages 18 and over from KnowledgePanel®, a proprietary, probability-based web panel of more than 50,000 individuals from randomly sampled households; the sample was designed to be representative of the U.S. population. After pretesting, the data collection for the survey began on November 16, 2012, and concluded on November 27, 2012. As shown in table 1, e-mails were sent to 1,852 randomly selected respondents to the original survey and 2,178 randomly selected respondents from the remaining members of KnowledgePanel®. The 2,600 respondents completed the survey in approximately 16 minutes (median time). Of the 2,600 respondents, 1,328 had responded to the original survey, while 1,272 were new survey respondents. Further details on the survey methodology are included in Appendix 1.

The responses to all the survey questions are presented in Appendix 3 in the order that the questions were asked of respondents. Tables of summary statistics for the respondent demographics by mobile phone usage are also included as tables C.89 to C.92. Beginning at table C.93, cross-tabulations are presented of consumers' use of mobile phones, mobile banking, and mobile payments by age, race, gender, education, and income.

            Table 1. Key survey response statistics: Main interview
Percent, except as noted
  Number sampled for main survey Qualified completes Cooperation rate
2011 re-interviews 1,852 1,328 71.7%
Fresh cases 2,178 1,272 58.4%
Total 4,030 2,600 64.5%
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The following sections of this report summarize key findings from the Federal Reserve Board's survey of consumers conducted by GfK, with a focus on how consumers are using mobile phones to conduct their banking, make payments, enhance information gathering while shopping, and manage their finances. The numbers cited in this report are derived from the Board survey unless otherwise noted. All data were weighted to yield estimates for the U.S. adult population. Only questions pertaining to these topics are discussed in the report; however, the complete survey questionnaire and the results of the entire survey are summarized in Appendix 2 and Appendix 3.

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Overview of the Mobile Phone Market


As of November 2012, 87 percent of Americans ages 18 and above owned or had regular access to a mobile phone. Of the mobile phone owners, 52 percent had a smartphone.2 While the percent of Americans with mobile phones has remained constant over the past year, smartphone ownership increased substantially from the 44 percent found in the 2011 survey.3

Rates of mobile phone usage remain high and consistent across demographic and socioeconomic groups. The prevalence of mobile phones demonstrates the extent to which they have become engrained in modern culture. Mobile phone usage is approximately 90 percent for persons ages 18 to 44, and declines only slightly to 86 percent for persons ages 45 to 59 and 82 percent for persons ages 60 and over. However, smartphone adoption is higher among younger generations: 75 percent of those ages 18 to 29 with a mobile phone have a smartphone, declining with each age group until reaching only 27 percent of those ages 60 and over with a mobile phone.

Mobile phone ownership is highest among non-Hispanic whites at 88 percent, relative to 83 percent for Hispanics and 81 percent for non-Hispanic blacks. However, adoption of smartphones is higher among minorities, as 60 percent of Hispanic mobile phone users and 55 percent of non-Hispanic black mobile phone users own a smartphone, relative to 50 percent of non-Hispanic whites.

Mobile phone and smartphone usage does vary with level of household income. In households earning less than $25,000 per year, 76 percent of adults have a mobile phone of some type, and 40 percent have a smartphone. Use of both mobile phones and smartphones increases with income category, reaching 95 percent and 70 percent, respectively, for adults in households earning more than $100,000 per year.

The relatively high prevalence of mobile phone and smartphone use among younger generations, minorities, and those with low levels of income--groups that are prone to be unbanked or underbanked--makes mobile phones a potential platform for expanding financial access and inclusion (see box 1 for survey results related to the unbanked and underbanked).


Box 1. The Unbanked, Underbanked, and Mobile Financial Services

Of those who participated in Board surveys, the share of consumers who are unbanked has declined slightly over the past year. In 2011, 10.8 percent of consumers reported that neither they nor their spouse or partner had a checking, savings, or money market account. In 2012, the share of unbanked consumers declined to 9.5 percent of the adult population. Adopting a more expansive definition of being banked that includes use of a reloadable prepaid card, the share of consumers who are unbanked declined from 9.0 percent in 2011 to 7.9 percent in 2012.

Of those currently unbanked, 42 percent report that they had a bank account at some point in the past. Using data on those Board survey respondents observed in both 2011 and 2012, 40 percent of those unbanked in December 2011 had obtained a checking, savings, or money market account by November 2012. Conversely, 4 percent of those who had a bank account in December 2011 no longer had an account by November 2012.

Among unbanked consumers, the most commonly cited reason for not having an account was simply not needing or wanting one (23 percent), followed by believing that they don't have enough money to justify an account (17 percent), and not writing enough checks to make having an account worth-while (16 percent). A further 11 percent of unbanked consumers don't have an account because they don't like dealing with banks, and 6 percent believe that the fees and service charges on bank accounts are too high (figure A).

Figure A. Most important reason for not having a checking, savings, or money market account

The share of consumers who report being underbanked--defined as having a bank account but using an alternative financial service such as a payroll card, payday lender, check casher, or auto title loan--has effectively remained constant over the past year. In 2011, 10.2 percent of consumers surveyed were underbanked, compared to 9.9 percent a year later.

Both the unbanked and underbanked make significant use of mobile phones and smartphones. Among individuals who are unbanked, 59 percent have access to a mobile phone and 50 percent of these are smartphones. More remarkably, 90 percent of the underbanked have a mobile phone, 56 percent of which are smartphones.

The underbanked population makes substantial use of mobile banking. Almost 49 percent of the underbanked with mobile phones report using mobile banking in the past 12 months, while more than 30 percent report using mobile payments.

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Trends in the Utilization of Mobile Banking and Payments

Services that allow consumers to obtain financial account information and conduct transactions with their financial institution ("mobile banking") and that allow consumers to make payments, transfer money, or pay for goods and services ("mobile payments") have become increasingly prevalent over the past year. In December 2011, for instance, 21 percent of mobile phone users and 42 percent of smartphone users reported that they had used mobile banking in the past 12 months. By November 2012, the prevalence of mobile banking had increased substantially to 28 percent of mobile phone users and 48 percent of smartphone users (figure 1).

However, use of mobile payments has increased far less rapidly. In December 2011, 11 percent of mobile phone users and 23 percent of smartphone users reported using mobile payments. By November 2012, usage of mobile payments had increased only slightly, to 15 percent of mobile phone users and 24 percent of smartphone users.

Figure 1. Usage of mobile banking and mobile payments by mobile phone type

Although the past year has seen some notable developments in mobile payments services (e.g., the launch of a mobile payment app by a major retailer, growth in the number of mobile wallets, partnerships between mobile payment services and major payment networks), using a mobile phone to pay for a purchase at the point of sale remains a relatively rare occurrence. Only 6 percent of smartphone users reported making a point-of-sale purchase with their phone in the past 12 months. However, as only 1 percent of smartphone owners reported making a point-of-sale purchase with their phone last year, the 6 percent incidence found in 2012 indicates that the use of mobile phones to make point-of-sale payments is increasing rapidly.

Despite the increasing availability of phones equipped with near field communication (NFC) chips for use with NFC-based payment services, retailers and consumers appear to be trending toward adoption of non-NFC-based payment services. Indeed, consumers making mobile payments were nearly twice as likely to have used a mobile app or barcode to make their payment as to have made a payment by waving or tapping their phone.

Concerns about the security of mobile banking and mobile payment technologies remain one of the primary impediments to further adoption. Moreover, consumers reported less confidence in the security of mobile banking and payments technology in the 2012 survey than they did in the 2011 survey.

However, despite the wealth of personal information stored on smartphones, and the frequency with which these phones are lost or stolen, only 54 percent of smartphone owners report that they use some form of password protection on their phone.

The other major impediment to adoption is the perception among consumers that there is no benefit to using mobile banking or mobile payments and that their banking and payment needs are already being met without these technologies.

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1. See Matthew B. Gross, Jeanne M. Hogarth, and Maximilian D. Schmeiser (2012), "Consumers and Mobile Financial Services," report (Washington: Board of Governors of the Federal Reserve System, March), to text

2. The figures derived from the Board's survey are nearly identical to the 85 percent mobile phone ownership rate and 53 percent smartphone ownership rate reported by the Pew Research Center in its September 2012 Smartphone Ownership Update, Leaving the BoardReturn to text

3. While the majority of banks and mobile financial service providers offer apps for both Android and iOS devices, some apps are only available for one platform. Among the operating systems utilized by smartphone users in the survey, Android is used by 48 percent of respondents, Apple's iOS by 35 percent of respondents, and BlackBerry by 5 percent of respondents.  Return to text

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Last update: August 2, 2013