A UX Case Study
Project Team: Matthew Weber, Kim Moy & Ion Iepure
October 10, 2015
How Do People Really Use Mobile Payments?
Our research showed that people pay with their phones to carry less, and to collect rewards.

As told by

Matthew Weber

A few months ago, I talked with Ion Iepure, VP of Mobile Payments at a major bank. Mobile Payments are in a very interesting space — the digitized wallet means a rewriting of our old payment expectations. It's an opportunity for everyone in the ecosystem to establish what will be the new norm, from consumers paving the way with their purchases to banks figuring out how to productize the process. Ion is in a prime position to see how mobile payments will be affecting everyone. "Ion," I asked, "what would be an interesting thing to investigate about mobile payments? What would you like to find out?"

Ion Iepure

"Motivations." said Ion. "I'd like to see some data that shows why people are using mobile payments. I see a lot of data about what people do, but not so much about why they do it."

Kim Moy

And with that, we started what was to become several months of investigation and search for business opportunity, using the mobile market as a starting point. I brought in Kim Moy, a fantastic researcher and ux/product designer, to kick off our research.

Kim and I started investigating the area with a series of surveys to uncover: why were people choosing to use their mobile phones to pay for things? We ran a total of four surveys. The first two surveys were broad in questions and small in the number of participants — and were meant to find broad signals to guide our research. We were looking for some big trends.

Initial Surveys

The first two surveys were small, with 107 participants.1 In both surveys, we targeted people who had made a mobile payment within the last 30 days. We asked them what they bought, paired with why they used mobile payments. At this early stage, we focused on qualitative research based on the qualitative.io format — asking open questions where the participants answer with their own words in paragraph format.

You can download the CSV files of the raw data too.

Survey Findings

People pay with their phones to carry less bulk

When asked about the value of mobile payments, consumers cited speed, convenience and ease most often. However, the most surprising benefit we saw was that 16% of people cited that they were looking to carry fewer things. Ion had said it was in line with what he had seen, but hadn't seen this specific finding before. We decided that it was a significant finding that deserved an additional study. In a few weeks we will be releasing another report about productizing people's need to carry less stuff. 2

Coffee, coffee, coffee

The most common thing that people buy with their phones is coffee, with Starbucks specifically being cited for 46% of all coffee mentions. Small incidental purchases (such as drugstore purchases, coffee, etc.) made up the vast majority of all purchases. 3

Rewards are integral to mobile payments

Due to the significant finding that coffee and Starbucks were the dominant mobile payment purchases, we ran a follow-up survey targeting another 100 people who used the Starbucks App to pay at the register in the previous month. Of this group, while only 46% of the group downloaded the app to track rewards points, a whopping 84% of them now use the app to track their rewards.

From the total group, 21% of them did not have a loyalty card before using the app. So we see an increased interest in point tracking and a very slight (too slight to be significant) increase in conversion to the rewards program. In a couple of weeks, we'll be releasing our full report on lessons from Starbucks mobile payments.

Takeaways for Leadership:

  1. For mobile payments, focus on small and routine purchases. Keep your ambitions in line with people's actual behavior of using mobile payments to simplify their lives, carrying less bulk with speed and convenience.
  2. Slick rewards program + mobile payments = insane loyalty. From our deep dive with Starbucks, we saw that mobile loyalty usage was incredibly sticky.

1There were two initial surveys — Survey A and Survey B — which were qualified with either the question "When, if ever, did you first make a purchase at a cash register using your mobile phone?" or "Have you ever used your phone to pay for an item in a store?". Only people who answered that they had used their phones for cash-register purchases in the last 30 days were qualified for the survey. There were several additional levels of qualification in the survey. Within the spreadsheets, participants are either labeled in the column "invalid," which means their entire work was not counted in findings, or if it is labeled "Invalid" only within a categorical column.

2Results are only from Survey A, which focused on the reasons the person initially used the phone.

3Results from the Survey A and Survey B were combined. The two surveys had similar but slightly different phrasing, but the trends were similar in both. 5% of respondents had identical demographic traits, and may be the same people in both surveys.

Image Credits
Illustration by Teresa Wojcicka.

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