Approximately one half of consumers who use mobile banking state that they would like to use their mobile phones to make purchases at the point of sale, compared with only one in five of all mobile phone owners, according to a new report from Javelin Strategy & Research.

 
The syndicated research report, “2011 Contactless Near Field Communication (NFC) Mobile Payments: Framing Mobile Payments on the Foundation of Mobile Banking” (available for sale) summarizes the recent and current state of the contactless payments environment and NFC-enabled technology and identifies mobile banking as the catalyst for mobile point of sale payments. Mobile banking is the natural foundation for mobile POS payments both from architectural and consumer behavior strategies. Contactless payments start with mobile devices, and Javelin research shows that 84% of all consumers use mobile phones, with over a third of mobile phone owners using smartphones. Javelin also notes that consumer comfort with contactless payments—an essential factor for adoption and use—will increase with consumers’ growing use of mobile devices for activities other than phone calls. It predicts that contactless payments will follow a similar trajectory of consumer adoption and use as that of mobile phone adoption.

Javelin data shows that two thirds of mobile phone users are sending SMS texts, one third are browsing the mobile web, and one quarter are downloading applications. Mobile banking—the function closest to mobile POS payments—has been adopted by over one in five of mobile phone owners in the past 12 months. Mobile bankers use such functions as sending mobile money transfers and mobile bill payments at much higher rates than all consumers.

“Mobile bankers are a prime target for early adoption,” said Beth Robertson, director of Payments Research at Javelin, in a prepared statement. “Mobile bankers are very tech-savvy when it comes to complex mobile money services. Our research shows that mobile bankers are almost four times as likely as all mobile consumers to use their phones for mobile purchases today, make more frequent purchases, and report higher average purchase amounts. Mobile bankers are the most active and interested users of mobile contactless payments at the point of sale today, as four of ten mobile bankers indicate that they would be very likely or likely to use their mobile phone to complete mobile contactless payments, compared to only 14% of all consumers.”

Javelin also recommends that FIs and vendors focus on integrating mobile POS payments into mobile banking. The report provides details of a variety of pilot projects undertaken by FIs and technology companies that test NFC-enabled technology and mobile commerce functions at the point of sale such as product information delivery, and debit and credit payments.

“The U.S. contactless payments industry faces certain hurdles including a limited number of contactless-ready merchant terminals and troubling consumer demand patterns,” said James Van Dyke, president and founder. “However, FIs and vendors that want to be first movers in the U.S. contactless payments market can overcome these challenges by integrating their mobile contactless/NFC programs directly within their existing mobile banking platform. FIs and vendors who engage their existing mobile banking customer base achieve two goals: they can foster consumer awareness and adoption among the large group of mobile bankers who want—and are ready to make—contactless payments and establish the value proposition of the service to the majority of merchants who do not accept contactless/NFC payments.”