Mobile Wallets Get a Tough Lesson from College Students
If mobile wallet developers are banking on young consumers to become early adopters, they should not include college students amongst them.
Of students who are familiar with mobile wallets, only 10% have used the technology to make an in-store purchase, while 17% have used a wallet app to initiate an online purchase, according to OnCampus research from the National Association of College Stores.
Cleveland-based OnCampus conducts online student panels monthly to address various topics related to shopping and financial trends, receiving feedback from 16,000 students from more than 1,100 campuses in the U.S. and Canada.
About 55% of students said they were either very familiar or somewhat familiar with mobile wallets. Of those, nearly 50% said they had used Google Wallet, while 36% said Apple Pay. Only 13% of students mentioned Android Pay, the successor to the original Google Wallet.
"Students are savvy shoppers who do a lot of research with their mobile devices in stores to compare prices," said Elizabeth Riddle, director of OnCampus Research at NACS.
Fifty-seven percent of students said they use a mobile device to compare prices, while 47% said they use mobile coupons.
But they remain cautious about using mobile wallets as a payment method, with 58% saying they do not plan to use a mobile wallet in the next year, Riddle added.
Of those who provided an explanation for their aversion to mobile wallets, 42% said they preferred traditional payment methods, 40% said they had no interest in mobile wallets, 37% said they were not familiar with mobile wallets and 35% said they did not think the technology is secure.
However, nearly half of the students said they believe mobile payments will be the primary payment method in five years. And they appear willing to wait that long.
"Students are pretty traditional, and they are not the ones running out and grabbing the newest technology products right away," Riddle said. "They kind of wait to see how things will pan out, and they want their friends to try it first before they invest in it."
As such, it was not surprising for the survey to reveal that 21% of students said they use debit cards "all of the time" for payments, Riddle added.
Cash remains popular with college students, with 34% saying they used it sometimes, 31% using it often and 6% saying all of the time. Those numbers fall in line with other industry research indicating millennials view cash as their main payment method for certain situations.
Credit cards were least popular, with 37.5% saying they never use them and another 12% saying they rarely use them.
Even though prepaid and gift card issuers might target college students as potential users, the research indicated prepaid cards were among the least popular payment methods. Forty-two percent said they rarely used prepaid cards, while 18% said they never used them.
Other researchers are finding similar trends in that age group.
Auriemma Consulting Group research shows 41% of a small sample size of 54 Apple Pay eligible consumers in the 18-24 age group said they have used Apple Pay. In another survey of credit cardholders from last November, Auriemma found that of 59 cardholders in the18-24 age group, 14% said they had used Apple Pay, while 12% had used Android Pay.
"We include students within our questions, but the base sizes are too small to analyze," said Jaclyn Holmes, senior manager of payments insights for Auriemma.
The Apple Pay data and general cardholders represent interviews with different audiences, so they are indicative of two different populations, Holmes added.