The IDC Financial Insights’ 2012 Consumer Payments Survey found that mobile applications are responsible for most of the mobile payments volume, with close to 50 percent of those who have paid for a purchase via mobile having used a mobile app at the point-of-sale. The numbers were slightly lower for mobile browser, contactless and SMS.

“One finding that was surprising was how much POS purchases people reported making,” Aaron McPherson, financial insights practice director at IDC, Framingham, MA. “Over a third of the people that had made a mobile payment said they had done it at the point of sale.

“What we are seeing is a lot of experimentation and one-off types of things,” he said. “A lot of that may be the Starbucks app, which would count as POS and has significant penetration.

“A lot of people have made a mobile POS purchase but have not done it a lot or with a lot of retailers.”

PayPal preferred
PayPal Mobile was the most common mobile payment method, followed at some distance by Amazon Payments and iTunes. Google Wallet was virtually flat from 2011 to 2012, while MasterCard MoneySend picked up quite a bit of use.

The report shows that 56 percent of respondents have used PayPal Mobile, 41.2 percent of consumers have used Amazon Payments, 39.6 percent have used iTunes, 21.3 percent have used Google Wallet and 20.1 percent have used MasterCard MoneySend.

There were numerous other mobile payments methods used by consumers but these are the only five that topped 20 percent. For example, Square, which has claimed $6 billion in transactions processed, was used by only 6.1 percent of respondents.

In some cases, consumers said they had used a mobile payments option that is not offered in the United States, reflecting that consumers are not paying much attention to mobile payments or do not understand the services they are using, per IDC.

With strong majorities interested in using all of the major mobile payment methods – apps, browser, contactless and text – the findings suggest that consumers have not yet decided on a favorite mode. This means support for a variety of mobile payment strategies will be required in the short term.

Interestingly, over 40 percent of those who have used a phone to make a purchase said they did so via contactless payments. With only a small number of near-field communications handsets in the market, the numbers suggest consumers may be confused and included contactless payment cards, per IDC.

While NFC is expected to have a significant presence in the United States beginning next year, it will not necessarily be the dominant mode of mobile payment.

For example, mobile payment solutions using 2D bar codes are gaining steam, such as the one offered by Starbucks, LevelUp and the new Passbook app from Apple.

“Online or remote purchases where a user is not physically in same the location are more popular because historically these have been around the longest and require the least amount of change in the current infrastructure,” Mr. McPherson said.

“However, I expect we will see mobile POS purchasing increase a lot of over the next few years,” he said.

Physical good purchases common
The report also found that physical goods were the most common mobile purchase, with more than 70 percent having purchased a physical good.

However, with more than 60 percent having purchased online services and digital goods, the results show that consumers are using their phones to purchase a variety of goods.

For financial institutions, the report lends some urgency to the need to these organizations’ efforts to develop mobile payments products as the demand is there and alternative methods are gaining with consumers.

“I favor the cloud wallets more than the NFC wallets at this point,” Mr. McPherson said.

“You want to try to hedge your bets by supporting as many different modes as possible from a retailer perspective,” he said. “That is now what retailers want to hear because it sounds likes you are asking them to spend money on a lot of different things but it also means they can take time and experiment to figure it out.”

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York