Who’s Really Driving Mobile Payments (You’ll Be Surprised)

The leading users of mobile payments in the U.S. are the people who also use prepaid cards, according to a report titled “Prepaid and Gift Cards in the U.S.” by market-research publisher Packaged Facts.

That includes customers who disproportionately fall into the unbanked and underbanked categories — more than 25 percent of Americans. Smartphone penetration is actually higher among groups underrepresented by traditional banking products and services: The survey says 89 percent of consumers from underbanked households have a smartphone, and even 64 percent of consumers from unbanked households have one, Chain Store Age reported.

Among all U.S. adults, about 56 percent have smartphones — roughly 80 percent use mobile phones, and 70 percent of those users have smartphones, according to a study released in July 2014 by Asymco.

In addition, adults under age 35, who are also more likely to be less-banked than their elders, do more card shopping and have a wider variety of cards in their wallet. The study estimates that Americans under 35 carry an average of 2.3 prepaid cards in their wallets.

Survey results also indicate that mobile-forward platforms with Millennial-era options such as P2P and bill payment will entice 18-34-year-olds to stay with specific payment platforms longer, according to the Packaged Facts report.

Mobile payments are also evolving the definition of what a “banked” customer is.  In a recent interview with MPD CEO Karen Webster, NetSpend President Chuck Harris explained how prepaid cards are leading to the rise of the  “self-banked” – those people who like and need the flexibility that stored value products offer.