Mobile payments have struggled to find a foothold among UK consumers. But despite competition from better-established payment options like contactless cards, there are some promising signs, according to eMarketer's new report, "UK Mobile Payments: After a Slow Start in a Competitive Space, Some Signs of Progress." (The full report is available only to eMarketer PRO subscribers.).
A June 2016 survey of UK internet users ages 16 to 70 by Pragma found nearly half of respondents had used mobile payments. The study also showed that those who had tried such services were generally satisfied, with only 4% of mobile payment users saying they chose that payment option less frequently than they had two years earlier.
Two transaction types in particular look to be driving adoption of mobile payments in the UK: travel purchases—particularly for Transport for London's Apple Pay-enable mass transit network—and peer-to-peer payments on platforms like Paym's, according to our report.
Mobile wallet use is also rising. An August 2016 study by the Interactive Advertising Bureau (IAB) and On Device Research found 24% of UK mobile buyers had used a mobile wallet to pay for products or services purchased via mobile device. Only Norway and China had higher response rates across the select countries covered.
Nonetheless, mobile payments are still far from UK consumers' favorite means of making purchases. According to June 2016 data from YouGov, UK internet users ages 18 to 34 were the most likely to use mobile sites/apps or contactless smartphone or smart watch capabilities to pay for purchases compared with older age groups. But millennials' enthusiasm was underwhelming, with only around one in 10 respondents in that age group calling either option their "preferred" payment method.