Simon-Kucher & Partners Report Explores the Psychological Biases Driving U.S. Consumers’ Mobile Payment Behaviors and Ways to Change Them

NEW YORK, November 30, 2024 – Simon-Kucher & Partners, a global strategy and marketing consulting firm today announced the release of the report titled, “How Behavioral Science can Unleash Digital Payments Adoption.” The report seeks to understand the behavioral and psychological biases driving U.S. consumers’ payment decisions, and explores behavioral based approaches to motivate and support mobile payment habits. The report examines behavioral barriers as opposed to technology obstacles or poor infrastructure that impede more widespread mobile payments adoption in the U.S.

The U.S. has one of the world’s highest smartphone penetration rates in the world. Yet, consumers are not embracing mobile payments on a significant scale, despite its benefits in terms of higher security, speed and convenience.

“In designing mobile payment features, we have neglected to consider the behavioral-based forces shaping the U.S. consumer’s payment choices and habits,” said Wei Ke, Ph.D., Managing Partner in the global banking division at Simon-Kucher & Partners. “If we want consumers to enthusiastically embrace mobile payments we first have to invest the resources to uncover the psychological barriers hindering adoption. From there we can design a mobile payment experience that can break down these barriers.”

Highlights from the report include:

• The majority of U.S. consumers (89%) still prefer paying with cash, credit card or debit card. Only 7.6% of respondents consider mobile as the preferred method of payment.

• Concerns about mobile payment security are causing U.S. consumers to think twice about paying with their smartphones. Almost 40% of reasons given for not using mobile payments were related to concerns over fraud and identity theft. Among non-mobile payment users, only 13% believe that mobile wallets are secure.

• Almost 70% of reasons for not using mobile payments were related to a lack of confidence in using mobile payments. Reasons for not using mobile payments included: I am not tech savvy (22.9%), risk of losing phone (17.7%), feared forgetting passwords (10.7%), might make mistakes (9.1%) and frustration setting up the new payment feature (9.3%).

• Social pressure has a minimal influence on mobile payment adoption. Even if half of their friends or a celebrity were using it, most consumers said they would still be unlikely to try a mobile payment app. Since celebrity endorsements and other forms of social influences will not necessarily encourage mobile payment usage, more innovative thinking is needed to incentivize adoption.

• Consumers prefer mobile payment apps offered by their primary bank. Among mobile payment users, 75% agree that they prefer to use a mobile payment app offered by their primary bank over one offered by a software company or another bank.

The report draws from insights based on a survey of U.S. adults about their payment attitudes, behaviors and preferences.

A recorded webinar based on the report is available via this link.

The full report is also available on the Simon-Kucher website.

Simon-Kucher & Partners, Strategy & Marketing Consultants:

Simon-Kucher & Partners is a global consulting firm with more than 1,200 professionals in 38 offices worldwide focusing on TopLine Power®. Founded in 1985, the company has more than 30 years of experience providing strategy and marketing consulting and is regarded as the world’s leading pricing advisor.