With millions of mobile apps available, consumers have grown increasingly picky about which apps they download—and engage with—for payments and other uses.
As mobile commerce continues to grow, many retailers, banks, and fintechs look at mobile apps as a way to tap into new consumer bases and to accommodate a diverse set of consumer expectations and preferences. From a payments perspective, it is critical to understand how and why consumers use apps in order to develop one that will be of value to a target audience.
Several surveys and reports have been conducted in the past several years that shed some light on consumer preferences and behaviors with mobile apps. App Developers conducted on of these polls, surveying 300 consumers to get a sense for how apps are used. Of note is the fact that consumers overwhelmingly use social media apps over any other types of apps, including those geared towards entertainment, news/weather/travel, health & fitness, utilities & productivity, retail/vouchers/offers, and dating.
That same survey found that almost three quarters (74%) only reported downloading free apps, with 68% saying they never buy in-app purchases. Less is more to many consumers as 40% report that they only download one to five apps and only 3% reporting they have downloaded 100 or more apps. Personal data is also a concern among most consumers, with 60% saying that they are concerned about their personal data. While this survey lays some groundwork on what it is consumers are looking for, much deeper insights need to be garnered to establish what a successful app requires and how to effectively construct a payments experience.
Another survey was completed via collaboration between PYMNTS and LISNR, which looked at 1,045 American consumers to see how they engage with merchant apps to enhance in-store shopping experiences. The results of this survey echoed that of the other poll, noting that consumers are highly selective about which apps they download. In a world where the number of available apps has multiplied exponentially, this is an important highlight. The App Store alone offers over 2 million apps and Google Play Store offers more than 5 million apps. The sheer magnitude points to a highly competitive ecosystem where only the best apps win. But what constitutes a great app? Consumer preferences shine light on the answer to this question, though it may not be what fintechs, financial institutions and retailers want to hear.
In the PYMNTS research, over 77% of consumers reported having downloaded five or fewer apps, again underscoring the competitive nature of the app universe. More than half (53%) of in-store shoppers actually use mobile apps to enhance brick-and-mortar shopping experiences via value-added features such as payment options, coupons, or purchase histories. Roughly one-third (33.6%) of consumers use apps in this manner (in-store) at least once a week.
Just 12% use these mobile apps to make in-store payments, signaling perhaps that this is an area for improvement. Most consumers (63.9%) still gravitate towards credit cards as a primary payment method for brick-and mortar shopping, which debit cards following closely behind (63.4%), cash coming in third (55.7%), and store cards trailing behind all (21.2%). Despite this, consumers noted that they would have a higher interest in using a merchant app for payments if it enabled them to skip checkout lines. In fact, 45.9% said that if using the app allowed them to bypass checkout lines, they would download the app and use it to make payments. Only 36% were interested in downloading a merchants app without this feature. Navigating a Competitive Future for Apps & Payments
Mobile apps still have significant room for growth, according to a consumer audience. Between perfecting payments opportunities and providing more loyalty and coupon offers, there are key areas that apps need to address to gain more market share. That said, if those hurdles are overcome, many consumers appear willing to download improved versions of mobile apps that address these shortcomings and improve features. More specifically, the features that pique consumers’ interest include:
Payments-specific features interested many consumers, specifically features that allowed:
The most significant finding surrounding app use is that most consumers want all offerings to be faster, easier, and more convenient than most current versions.
Given the rise of mobile payments, mobile apps have become table stakes for retailers, fintechs, and financial institutions alike. While the data herein reflects consumer preferences toward merchant apps, the learning can easily be applied to any mobile apps where payments are involved. Convenience and ease-of-use continue to be huge factors in how frequently — if at all — that users download and engage with apps. They are more likely to do either if there are unique opportunities to skip lines or earn rewards. The challenge for app developers and those creating the payments experience will continue to be differentiation from the competition. A seamless experience that adds value will better engage consumers who are looking for a frictionless experience that makes their lives easier.