Hispanics Adopt Mobile Banking, Payments at Higher Rate

federalreserve-mobile-banking-adoption-by-race-march2012.jpgNon-Hispanic black and Hispanic users represent a disproportionately high rate of adoption of mobile banking, finds a [pdf] March 2012 report from the Federal Reserve. While the former group makes up only 10.9% of mobile phone users, they account for 16.2% of mobile banking users. Similarly, Hispanic users, who make up 12.8% of all mobile phone users, represent 17.1% share of those using mobile banking.

Usage Correlates With Age, Education

The study also found that mobile banking users are split evenly between men and women, and use of mobile banking is unrelated to household income. Mobile banking is highly correlated with age, though: those aged 18-29 make up 43.5% of users, relative to 22% of mobile phone users, while those 60 and older represent just 6% of mobile banking users, while holding 24% share of all mobile phone users. Additionally, mobile banking use is correlated with education: almost three-quarters of users have some college education, although the group comprises just 60% of all mobile phone users.

Overall, 21% of mobile phone users report having used mobile banking services in the past 12 months. The most popular activities among users were checking an account balance or recent transactions (90%), downloading a bank’s mobile banking application (48%), and transferring money between 2 accounts (42%). Among those not using mobile banking, the chief reasons are that their banking needs are being met without mobile banking (57%) and that they are concerned about the security of mobile banking (48%).

Hispanics Show High Adoption of Mobile Payments, Too

Hispanic users show very high usage of mobile payments, also, accounting for 20.9% share of all users, relative to 12.8% share of all mobile phone users. Conversely, non-Hispanic whites are less likely to use mobile payments, making up 58.3% of users, compared to 69.3% of all mobile phone users. Almost 13% of non-Hispanic blacks have used mobile payments in the past 12 months, relatively comparable to their 11.2% share of the mobile phone user sample.

Age Also Plays a Role

Much as with their adoption of mobile banking, younger demographics see a higher use of mobile payments. While 18-29-year-olds make up just 20.3% of mobile phone users, they account for a significant 37.3% of mobile payment users. Similarly, 30-44-year-olds, who make up 25.6% of mobile phone users, account for 35.9% of those using mobile payments. This means that roughly three-quarters of the mobile payment users surveyed are under 44 years of age.

Meanwhile, income does not appear to play a role in mobile payment use, nor does education level. Overall, 11% of respondents, who were required to have regular internet access and a bank account, reported having made a mobile payment in the past year.

Other Findings:

  • Concern with security is the most common reason given for not using mobile payments, cited by 42%. According to a February 2012 report from Radius Global, 86% of Americans say that data security concerns have either a significant influence (49%) or some influence (37%) on their likelihood to make purchases through a smartphone.
  • Of those concerned with security of mobile payments, hackers gaining remote access to their phone (45.6%) is the leading concern, followed by someone intercepting their payment information or other data (32.8%). Data from an Oracle survey released in December 2011 indicates that one-quarter of smartphone owners worry that someone will steal their payment information if they use their mobile phone to pay in stores.

About the Data: The Federal Reserve survey was administered by Knowledge Networks, an online consumer research company, on behalf of the Consumer Research Section in the Federal Reserve Board’s Division of Consumer and Community Affairs. The survey was conducted using a sample of adults ages 18 and over from KnowledgePanelŪ, a proprietary, probability-based web panel of more than 50,000 individuals from randomly sampled households; the sample was designed to be representative of the US population. After pretesting, the data collection for the survey began on December 22, 2011 and concluded on January 9, 2012. 2,290 respondents completed the survey.