In a sign of the success PayPal has had in marketing its digital wallet, slightly more than half of consumers surveyed said they would choose PayPal over the other mobile payment options available for holiday shopping in stores.
Use of a bank's mobile payment app ranked second with 21%, while the month-old Apple Pay was third at 10%, according to Chicago-based Retale's latest study on consumer awareness of mobile payments. The company conducted its survey of 1,000 U.S. adults earlier this month.
Only 8% of those surveyed said they would most likely use Google Wallet or a retailer's mobile pay app. The CurrentC wallet being developed through the Merchant Customer Exchange was named by only 2% of those surveyed.
PayPal's strategy has been to support multiple technologies to enable support at a broad range of merchants. It has direct deals with many merchants that allow consumers to pay by typing a phone number and PIN; at others, it supports a plastic PayPal card that handles payments over Discover's network. PayPal also has mobile apps for cloud-based payments from smartphones.
Lately, PayPal has been placing its app on smartwatches such as Pebble, Android Wear and Samsung Gear.
Rival mobile wallets have had a slower start. Apple Pay launched only last month, and only the latest iPhones have the built-in Near Field Communication chip necessary for contactless payments. Apple Pay will also be a part of the Apple Watch, which will be released next year.
CurrentC, a system that will utilize QR codes for payments, is still being tested by retailers.
Google Wallet has been around longer, but suffered in its early life from a lack of support from card issuers and wireless carriers. Google Wallet is also caught up in Apple's conflict with MCX/CurrentC retailers; the companies that shut off NFC readers to block Apple Pay are also blocking Google Wallet and any other contactless payment method.
Retale, the company that published the survey, is a U.S. company that aggregates weekly retail circulars as a member of Bonial International Group to provide shoppers with a digital alternative to print circulars.
Acknowledging that mobile payments are still in "early days," Retale president Pat Dermody said the research indicates retailers should want to get on board with mobile payment options.
"Though the majority of shoppers have yet to use mobile pay, they do see it as an increasingly useful way to pay in-store, particularly during busy shopping periods," Dermody stated in a press release. "For retailers interested in bridging the gap between online and offline, mobile may offer a solution."
Of those surveyed, 36% consumers had previously used a mobile device to make a payment in a brick-and-mortar store, while 64% had not. However, mobile pay use in 2012 was just 15%, indicating the category has more than doubled over a two-year period.
Nearly three of five respondents [56%] indicated they would be interested in using a mobile device to pay for a gift or other item in a retail store this holiday season. An equal number or respondents felt retailers should offer some type of mobile payment option in the store.
Those familiar with the mobile payment experience expressed enthusiasm, with 91% saying they would use a digital wallet again to purchase holiday gifts.
Fifty-eight percent said mobile payment was convenient, while 24% said it was inconvenient compared to using cash or payment cards.
Generally, consumers felt more comfortable with mobile payments for lower-value purchases, with 68% citing items $50 or less as their threshold. Only 12% said they would be comfortable with mobile payments on items $250 or more.
"As adoption increases and in-store mobile payment becomes more normal, we will see spending amounts rise," Dermody said. "Right now, it's a comfort issue."
Millenials were "by far" the most receptive to mobile wallets, the report said. Fifty-three percent of respondents in that age group have already made in-store mobile payments, a figure that is 17 percentage points higher than the average of other age groups (36%).