MOBILE COMMERCE TRENDS

THE CONSUMER

MOBILE BANKING TRENDS

BEHAVIOR AFFECTING TRENDS

DEVICE USE

MOBILE PAYMENT TRENDS

SAFETY CONCERNS

BUSINESSES & MOBILE

BENEFITS TO BUSINESS

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THE CONSUMERBoomers and Seniors are

engaging in digital banking.

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The Consumer $

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The U.S. population is aging and changing banking behaviors.

New consumers opening their �rst account at a �nancial institution represent a demographic that is DIFFERENT THAN FIVE TO 10 YEARS AGO, meaning an “older”

consumer is opening up their �rst account with the bank and/or credit union.

U.S. population over the age of 44

0%

2004 2014

10%

20%

30%

40%

34%39%

The Consumer $

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Boomers and Seniors are engaging in digital banking. Although Boomers and Seniors have tended to be late to technological adoption, these groups are showing an increasing willingness to engage in digital banking.

Technology services such as EMAIL, SKYPE AND EBAY have become increasingly popular with Boomers & Seniors, and as their technology comfort level grows, so does their adoption of online banking.

Mobile banking consumers are 14 years younger than

o�ine bankers.

$$

Mobile Bankers

O�ine Bankers

MOBILE BANKINGTRENDSMore and more consumers are starting

to “ditch” their PC and rely solely on

their phone and/or tablet to conduct

their banking needs.

2

More and more consumers are starting to “DITCH”

THEIR PC and rely solely on their phone and/or tablet

to conduct their banking needs. MOBILE-ONLY BANKING

IS INCREASING, while PC-only banking has declined

over the past year.

Mobile Banking Trends $

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Mobile Banking Trends $

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Approximately 40% of digital bankers are using multiple

devices to access their �nancial information.

Apps are becoming the preferred way to access

mobile banking – the number of consumers using mobile

browsers or text for banking declined.

Checking balances is the dominant mobile banking

activity, while over a third of users also pay their bills, transfer funds and view statements via mobile.

$ XXX$

Mobile Banking Trends $

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The Federal Reserve found that even among mobile phone users who do not currently use mobile banking, 28% report that they will de�nitely or probably use mobile banking at some point.

The under banked make comparatively heavy use of both mobile banking and mobile payments, with 29% having used mobile banking in the past 12 months.

28%

29%

CONSUMER BEHAVIORAFFECTING TRENDSMobile features, such as mobile remote

deposit, are changing how consumers

interact with their �nancial institutions.

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For banking and credit unions, cross-sell opportunities

will become INCREASINGLY RELEVANT as more

consumers rely on the digital banking channel to conduct

transactions and BECOME LESS DEPENDENT on brick

and mortar visits.

Consumer Behavious A�ecting Trends

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DEVICE USEAlmost half of tablet owners use their

device for online banking access.

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Device Use $

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Tablet Ownership

Almost half of tablet owners use their device for online banking access and we anticipate continued fast growth as consumers desire a more engaging digital banking experience.

0%

2011 2011 2014

10%

20%

30%

40%

50%

19%

32% 50%

MOBILE PAYMENTTRENDSWe de�ne a mobile wallet as an

app or mobile site that collects a

consumer's payment information

and credit card numbers and helps

them transact o�ine and online.

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Mobile Payment Trends $

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We de�ne a mobile wallet as an app or mobile site that collects a consumer's payment information and credit card numbers and helps them transact o�ine and online.

Between retail banks and the consumer, the relationship is increasingly taking place online and on mobile rather than in physical banks. In order to di�erentiate themselves from competitors, banks will become interested in o�ering apps that go beyond just simply checking your balance, paying your credit card, and remote check deposit.

Only 11% of people in the United States have used a mobile wallet, according to Forrester.

11%

Mobile Payment Trends $

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Mobile commerce will account for a third of holiday

shopping in 2014.

Mobile commerce accounted for around 20% of e-commerce sales during the Black Friday weekend this year.

$ 20%

As retailers release and improve their mobile apps, and tablets proliferate, we expect that mobile commerce is not only going to grow, but accelerate.

Mobile Payment Trends $

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Only about 12% of mobile phone owners had made a mobile payment in the past 12 months, and the most common use of mobile payments was to make an online bill payment.

Concerns about the security of the technology were the primary

reason given for not using mobile payments (42%). $

12%

42%

SAFETY CONCERNSConsumers were concerned about hackers

gaining access to their phone remotely,

or someone intercepting payment

information or other data.

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Safety Concerns $

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The FTC’s interest in mobile payments stems from its mandate to protect consumers in the commercial marketplace, as well as its broad jurisdiction over many of the companies that participate in the mobile payments ecosystem.

Safety Concerns $

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A Federal Reserve study reported that 42% of consumers were concerned about data security, and this concern was the most cited reason why consumers have not used mobile payments.

42%

BUSINESS AND MOBILEGoogle VP of Payments Osama Bedier

observed: "Merchants adopt new payment

models because they increase sales.

If I gave you a payment option that was

totally free, merchants wouldn't adopt it

unless it increased sales."

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Business & Mobile $

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U.S. mobile commerce sales--that is, purchases made on smartphones and tablets--hit $5.3 BILLION in 2011, up 83% from the year before.

Generator Research, a consulting �rm specializing in digital media, projects that by 2014, usage by consumers will grow 600% to490 MILLION worldwide.

$5.3B

400M

US Mobile Commerce Sales

Consumer Usage Worldwide

BENEFITS TOBUSINESS

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Bene�ts to Business $

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John Graves, chief �nancial o�cer for the Girl Scouts of North East Ohio reports that Girl Scout cookie sales soared after he cut a deal with a mobile payment company to put credit card processing in the hands of little girls armed with Thin Mints. Customers loved it, and sales jumped by 13% for 150 participating troops, while troops that did not adopt the technology did not see any improvement in sales. In 2013, 536 troops participated in the card reader program. Graves reports that participating troops had the largest restocking orders in history.

Being a cash-only business often decreased sales because customers without enough cash on hand were unable to buy their products. So when a cash-only business can start to accept credit card payments through a mobile payment program, they immediately increase their customer base and increases sales.

CASE STUDYABILITY TO OFFER CREDITCARD PAYMENTS

A common struggle for small businesses is tracking inventory and customer behavior. But with mobile payment services, you can automate these processes and better serve your customers.

TRACK CUSTOMER TRENDSAND INVENTORY

15%INCREASE

Bene�ts to Business $

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The time savings can also directly increase pro�ts by allowing you to accommodate more customers in the same period of time.

INCREASE SPEED OF CHECKINGCUSTOMERS OUT

Save money on creditcard fees.

SAVE MONEY

Cash is a signi�cant risk for any small business. For businesses that depend on payment for large deliveries, like catering service, the ability to accept payments on-the-spot is far superior to the wait that invariably accompanies sending out invoices for goods already delivered.

REDUCE RISKS

Accepting mobile payments represents a signi�cant savings in cost over today’s complicated cash register systems. Mobile credit card processing eliminates the need for pricey specialized equipment or custom software, making transactions accessible from any smartphone, with similar easy-use technology most customers and employees are already comfortable with.

Bene�ts to Business $

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45% OF 1,000 RESPONDENTS cited “not getting paid on time by clients and customers” as the biggest challenge to managing their cash �ow. Other factors were low pro�ts or lack of business, and 9% said they had trouble getting invoices out in a timely manner.

For customers, mobile payments o�er a range of convenience. It’s is generally faster and more e�cient than a traditional cash register transaction, and most payment processing software emails a receipt, which makes keeping track of purchases and spending easier.

IMPROVE CUSTOMER SERVICE

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