Visa published a report claiming the use of mobile payments has surged in the last year. Tripled to be exact. This looks almost too good to be true, and when you read further down the article, it certainly is.
According to the Visa study, the number of Europeans regularly using a mobile device for payments has soared since 2015 from 18 percent to 54 percent.
The study looks comprehensive, polling over 36,000 online consumers in 19 European countries. Such a huge jump is a big red flag that there is some fundamental problem in the study. The questions and methodology were not released in detail.
Another red flag with the numbers in the study is the accompanying press release that claims 86 percent of users in Israel are mobile payments users. A quick survey of a very digitally savvy co-working space in Israel showed totally opposite results. Most people answered with “no.” Some added a caveat, “Wait, is a car hailing app considered mobile payments?” or “I used digital payments in the US -- I wish I could use it here.”
Perhaps downloading an app from the app store is considered using mobile payments for the sake of this study?
It is also not clear what the 100 percent here is? Is it all the people who bank? Maybe it is all the people with smartphones or all the people who have a payment app on their smartphone? How is a mobile payment user even defined?
Luckily, other studies shed a bit more light on the adoption of mobile payments, or lack thereof.
According to 2015 data from Trustev, only 20.7 percent of iPhone users and only 14 percent of Android/Samsung users have ever used Apple, Android, or Samsung Pay. Of the users who have used these mobile wallets, a vast majority only use them once a week. 38% of users with an Android Pay or Samsung Pay app have never even used it. This is a far cry from Visa’s 54 percent mobile payments claim.
It seems Visa uses “mobile payments” to mean “mobile commerce”. As this paragraph from the press release explains, “In the UK, over two-fifths (43 percent) purchase high-value items such as holidays and electronics on a mobile device as well as regular transactions such as paying household bills.”
Even if we take Visa’s numbers to mean mobile commerce, the picture is not that rosy. According to the World Payments Report from Capgemini and BNP Paribas, while digital payments are increasing, cards still remain the fastest-growing digital payment method since 2010, holding at 11.8 percent. Digital payments only hit a 10 percent growth rate last year, accounting for 426.3 billion transactions.
In 2013, mobile payments and mobile commerce combined, which seems to be what Visa was actually measuring, were only 4 percent of of all debit or credit card transactions that year. Even if you apply the 2015 10 percent growth rate to 2013 figures, volumes are still pretty low.
Let me be clear, Visa: paying my gas bill on an app is not mobile payments, nor is using Travelocity.
It was good clickbait. Chapeau.
P.S. Fintech seems to have a semantics problem, with companies saying one thing while meaning another. Earlier it happened with Lemonade and its misuse of P2P.