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CoverStory

A consumer trends survey conducted for wallets and used for tap-and-go payments at vending
machines and thousands of merchant locations. Gartner
Fiserv in 2017 by Harris Poll revealed Inc. predicted that 50 percent of consumers in mature
that 13 percent of consumers had used markets will be using wearables or smartphones for at
least some payments this year.
digital wallets during the previous
30 days; 15 percent had used Juniper Research Ltd. expects the global value of mobile
digital wallets within the past year. and wearable contactless payments to exceed $95 billion
in 2018. While that total is just a fraction of the trillions
of dollars in annual card-based payments, it's a notable
Mobile gearing up increase from 2015 when wearables accounted for just $35
billion in payments.
That's the big plus for mobile payments, which got a kick-
start four years ago with the introduction of Apple Pay, and Both Visa and Mastercard have been working with
now include several bank and nonbank brands. According companies specializing in consumer wearables to support
to Boston Retail Partners, 57 percent of top retailers were payment functionality. The arrangements leverage
accepting mobile payments last year, up from 36 percent tokenization, considered by many to be the safest way to
in 2016. "That's a huge acceleration," said John Rosner, Vice authenticate payments by replacing account information
President of Product Strategy for card services at Fiserv Inc. with unique digital identifiers (tokens). "Visa continues
He said that acceleration will continue as more consumers to focus on delivering the tools and technologies that
adopt smart phones that support payment apps. empower our partners to offer safe, secure and convenient
payments to consumers via connected devices," Visa
Research just released by the Pew Research Center stated in celebrating the company's support for payments
suggests 77 percent of Americans owned smartphones initiated using Fitbit smartwatches.
in 2017, compared to 35 percent in 2011. Not surprisingly,
ownership is highest among younger adults, with 92 "Consumers today are expecting technology to help them
percent of those between the ages of 18 and 29 owning accomplish life's daily tasks with as few steps or clicks as
smartphones, according to Pew's research. possible," Mastercard Senior Vice President of Commerce
for Every Device Kiki Del Valle said of that company's
A consumer trends survey conducted for Fiserv in 2017 by collaboration with Fitbit. Del Valle added that Mastercard
Harris Poll revealed that 13 percent of consumers had used is focused on supporting secure payments using any
digital wallets during the previous 30 days; 15 percent connected devices, from wearables to connected cars and
had used digital wallets within the past year. Rosner, smart homes, too.
meanwhile, pointed to data from Apple Inc. indicating 74
percent of Apple Pay users think it is a better way to pay There is much research to suggest consumers and
than using plastic. financial institutions, alike, are ready for these changes.
The Financial Brand, which tracks trends in banking
Convenience clearly is a driver of mobile payments and payments, reported that among global financial
adoption, Rosner said. Mobile wallets also address services executives surveyed last fall, six out of 10
many of the security concerns associated with electronic consider removing friction from the customer experience
payments, since all transactions are tokenized. "The level to be the biggest development in 2018. The third most
of security is greater than any other form of payment," important trend (cited by 42 percent) was improvements
Rosner added. in multichannel delivery.

Despite the optimism, Raymond Pucci, Associate Director Mastercard, which tracks consumer discussion topics on
of Research Services at Mercator Advisory Group, said social media, reported in a 2017 study that wearables as
there remain factors that inhibit broader adoption of payment devices were the hot topic in 2016, dominating
mobile wallets like Apple Pay, Android Pay, Samsung 37 percent of social media conversations on emerging
Pay and others. "Mobile shoppers want more integrated payment technologies.
features and need more engaging reasons to use mobile
payments, but most payment vendors and their merchant Biometrics finding fans
clients have not yet provided that," Pucci said.
Meanwhile, a 2017 survey of 1,000 U.S. consumers by AYTM
Wearables on the rise Market Research found 86 percent of respondents are
interested in using biometrics to authenticate payments.
The emergence of smartwatches and other Internet- Consumers are most familiar with fingerprint recognition,
connected wearable devices may provide some of the with 30 percent saying they used it once or twice and 35
additional engagement consumers are looking for. Several percent saying they use the technique regularly.
of these, including Fitbit, now can be linked to digital

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