Payment Metrics - · PDF fileThis report titled Payment Metrics: ... American Express Lloyds TSB Samsung ... Blackberry, HTC, LG, Nokia, Samsung)

Payment Metrics

© Finaccord, 2012 Web: www.finaccord.com. E-mail: [email protected] 1

Payment Metrics: Consumer Attitudes towards and Usage of Traditional

and Emerging Means of Payment in the UK

Report Prospectus

March 2012

http://www.finaccord.com/

mailto:[email protected]

Payment Metrics


Prospectus contents

What is the scope of the research?

Which organisations are covered by this research?

What methodology has been used?

What is the report structure?

What are the key features of the research?

How can the research be used?

Who can use the research?

What are some of the key findings?

What is the cost and format?

How can the research be purchased?

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Payment Metrics


What is the scope of the research?

This report titled Payment Metrics: Consumer Attitudes towards and Usage of Traditional and

Emerging Means of Payment in the UK is a brand new study about the way in which consumers

currently pay for different products and services and how this is likely to change in future. It covers

both established payment means, including different types of payment card, and payment methods

that seem set for rapid growth in future, most notably mobile and contactless payments. In addition,

consumer behaviour is analysed in the fields of specialised online payments and domestic /

international remittances, and the research also addresses two areas that are central to consumers’

choice of payment means: loyalty programs; and insurance and assistance policies linked to added

value accounts and payment cards.

The report examines how consumers state that they are most likely to pay for small, medium-sized

and large irregular purchases at present and also how they report paying for common services that

require recurring payments (e.g. cable / satellite TV, electricity, gas or water bills, flat or house

rental, travel season tickets etc.). In both cases, it quantifies usage of the following payment

means: cash; cheques or postal orders; debit cards; credit or charge cards; rechargeable prepaid

cards; and any other means (e.g. mobile or online payments not involving debit, credit or charge

cards). Also, for regular payments, it takes into consideration direct debits, standing orders and

bank transfers, and distinguishes between rechargeable prepaid cards with multiple usage

functions and those usable for one particular service only.



Payment Metrics


Which organisations are covered by this research?

Amazon LG Sainsbury's

American Express Lloyds TSB Samsung

Apple MasterCard Skrill

ASDA Moneygram Sony Ericsson

Barclays Motorola Tesco

Blackberry NatWest T-Mobile

Diners Club Nokia Virgin

Google O2 Visa

HSBC Orange Vodafone

HTC PayPal Western Union

Companies reported on by consumers in this study

Amazon IKEA FAMILY

American Express Membership Rewards John Lewis / Waitrose Partnership

Avios (formerly Airmiles) Marriott Rewards

Barclaycard Freedom Maximiles

Best Western Rewards M&S Rewards or M&S Premium Club

bmi Diamond Club Nectar

Boots Advantage Priority Club

British Airways Executive Club Tesco Clubcard

GAME Reward The Co-operative Membership

Hilton HHonors Virgin Flying Club

Loyalty programs reported on by consumers in this study

Included where relevant in the

chapters about payment cards, mobile

payments, online payments and

domestic / international remittances.

Included in the chapter about loyalty

programs.



Payment Metrics


What methodology has been used?

The research for this study was carried out during February 2012 using an online consumer panel. In

total, completed surveys were filled in and submitted online by over 1,000 consumers breaking down

by age group, annual household income band and geographical location as illustrated in the charts

below.

16-24, 21.5%

25-34, 15.7%

35-44, 17.3%

45-54, 13.4%

55-64, 12.2%

65 or over, 19.9%

Less than £10,000, 14.9%

£10,000 -£14,999, 16.1%

£15,000 -£19,999, 12.3%

£20,000 -£24,999, 12.7%

£25,000 -£29,999, 11.5%

£30,000 -£39,999, 13.5%

£40,000 -£49,999, 7.9%

£50,000 -£59,999, 4.1%

£60,000 -£79,999, 4.2%

Over £80,000, 3.1%

London / Greater

London, 15.3%

South-East (exc. London),

14.8%

North-West, 12.1%

South-West, 8.9%

Scotland, 8.0%

West Midlands, 7.8%

East Midlands, 7.1%

East Anglia, 6.9%

North-East, 5.2%

Wales, 2.8%Northern

Ireland, 1.1%

Yorkshire /

Humberside, 10.3%



Payment Metrics


What is the report structure? (1)

0. Executive Summary: providing a concise evaluation of the principal findings of the report.

1. Introduction: offering rationale and a detailed description of methodology.

2. Payment Types: beginning with an analysis of the main payment methods currently used by

consumers for irregular purchases, differentiating between low-value (less than £15), medium-

value (£15-£50) and high-value (more than £50) purchases, followed by a consideration of payment

means used for 14 common types of recurring purchase (e.g. Council Tax, electricity / gas, mobile

telephone). Payment methods benchmarked include cash, cheques / postal orders, credit / charge

cards, debit cards, direct debits / standing orders, and rechargeable prepaid cards.

3. Payment Cards: offering a definitive overview of consumer holdings and utilisation rates of

payment cards with separate consideration afforded to card function (i.e. debit, charge, credit,

store and rechargeable prepaid cards), card brand / network (i.e. American Express, Diners Club,

MasterCard, Visa and private label cards), card status (i.e. standard, gold, platinum and ultra high

status cards), card target (i.e. consumer and business cards), and card type (e.g. airline, charity,

football club, hotel chain, loyalty scheme, retailer, supermarket and telecoms cards).

Report structure continued overleaf...



Payment Metrics



4. Loyalty Schemes: investigating membership and engagement rates both by generic type of

loyalty program and across 20 of the largest specific loyalty programs in the UK (as listed on slide

4), this section concludes with an analysis of the program structures preferred by consumers as

determined by earning systems (i.e. cashback, discounts, points / miles, vouchers) and earning /

redemption opportunities (i.e. with single organisations or across multiple, different organisations).

5. Insurance and Assistance: providing data for penetration rates across added value accounts and

payment cards plus analyses of perceived value to consumers and claims utilisation / frequency for

16 types of insurance and assistance (e.g. breakdown recovery insurance, card protection

insurance, concierge services, home emergency insurance, identity protection assistance, mobile

gadget insurance, travel insurance etc.) that can be linked to payment products.

6. Mobile / Contactless Payments: delivering unique insight concerning consumer awareness of,

receptiveness towards and general expectations concerning mobile and contactless payments with

results broken down by both gender and age group, in order to highlight important socio-economic

differences, and by make of mobile phone used (e.g. Apple, Blackberry, HTC, LG, Nokia, Samsung)

with a view to demonstrating how this variable will also affect consumer behaviour.

Report structure continued overleaf...



Payment Metrics



7. Online Payments: a summary of frequency of usage by consumers of different online payment

means such as Amazon Payments, Google Checkout, PayPal, Skrill (formerly Moneybookers) and

direct entry of payment card details - how do these options stack up against each other?

8. Domestic / International Remittances: a final chapter benchmarking consumer behaviour in the

fields of domestic and international remittances with implied market shares calculated for the

competing remittance options, namely: Moneygram; PayPal; Skrill (formerly Moneybookers);

Western Union; other companies (excluding banks) offering a remittance service; direct debits,

standing orders and other bank transfers (e.g. BACS); cash, cheques or postal orders sent in the

post; prepaid or gift cards sent in the post; and person-to-person payments sent by mobile phone.



Payment Metrics


What are the key features of the research?

Key features of this report include:

• coverage of consumer attitudes towards and utilisation of a very broad range of payment means

including long-established options (e.g. cash, direct debits / standing orders, payment cards) as well

as more recent or emerging alternatives (e.g. domestic / international remittances, mobile payments,

specialised online payment means);

• detailed analysis of consumer holdings and utilisation of the numerous different types of payment

card available in the UK including debit, charge, credit, store and rechargeable prepaid cards;

• cutting-edge investigation into consumer awareness of and interest in using mobile and contactless

payments including a ranking of organisations that they are looking to for mobile payment solutions;

• unique consideration of consumer behaviour in the context of 20 specific loyalty programs

including Avios, American Express Membership Rewards, Boots Advantage, Maximiles, Nectar,

Priority Club and Tesco Clubcard;

• insights into the main types of insurance and assistance that can be added to payment products to

encourage consumers to acquire and use them.



Payment Metrics


How can the research be used?

You may be able to use this report in one or more of the following ways:

• gain access to a complete ‘tool kit’ for organisations with an interest in payments to understand the

current behaviour of UK consumers in this huge and diverse sector;

• know exactly which types of card are held most widely by consumers and which they report using

most often - for example, how does frequency of usage of the many different types of affinity and co-

branded card compare to that of regular cards and what differences in utilisation are visible when

cards are analysed by function, brand, status and target?

• appreciate the extent to which UK consumers are ready to embrace future opportunities to make

payments using their mobile phone (and, possibly, other devices such as wristwatches);

• understand the typical member profile of the UK’s main loyalty programs and the extent to which

each has engaged its members to actually make use of it;

• evaluate which forms of insurance and assistance are most likely to enhance the appeal of

payment products and which are most likely to be used by consumers in the form of claims or calls

for assistance.



Payment Metrics


Who can use the research?

1. Banks, other card issuers and card brands: this research offers valuable insights not only about dynamics

in the payment card market but also about alternative methods of payment that increasingly threaten to

replace cards;

2. Mobile telecoms operators: around the world, mobile telecoms firms are working to realise a future in

which mobile phones become a primary means of making payments - this study sheds light on an array of

issues related to this evolution in the UK;

3. Other payment companies: organisations active in specialised payment segments such as online

payments and domestic / international remittances will benefit from the wide-ranging data in this report;

4. Manufacturers of payments-related hardware and software: opportunities exist for a wide range of

payment technology companies to occupy influential positions in the payments value chain;

5. Insurance, warranty and assistance companies: combining insurance and assistance with traditional

payment products is an established practice but what could the opportunities be in this field in relation to

emerging payment means?

6. Companies that receive payments from consumers: organisations such as electricity / gas firms, media

companies, supermarkets and travel entities could all benefit from the unique perspectives in this study

which will help them to understand how their customers want to pay them in the future.



Payment Metrics

© Finaccord, 2012 Web: www.finaccord.com. E-mail: [email protected]

Payment means used most frequently for irregular purchases - unweighted average across all transaction sizes

12

What are some of the key findings? 1. For one-off purchases, payment habits among consumers aged from

16 to 24 are very different from those of individuals in older age groups

Source: Finaccord Payment Metrics survey

0%

12%

24%

36%

48%

60%

16-24 25-34 35-44 45-54 55-64 65+

Debit card

Credit / charge card

Cash

All other means



Payment Metrics


Card utilisation frequency by card function

13

What are some of the key findings? (cont.) 2. By card function, rechargeable prepaid cards experience a lower frequency

of use, where held, than debit cards and credit, charge and store cards


All debit

cards

All credit, charge

and store cards

All rechargeable

prepaid cards

0%

20%

40%

60%

80%

100%

Main card used most frequently

Card used most frequently but not main one

Card used sometimes

Card used rarely

Card never used



Payment Metrics


Receptiveness among respondents with a mobile phone towards

the concept of using mobile phones to make payments

14

What are some of the key findings? (cont.) 3. Respondents with Apple and HTC mobile phones display the

most enthusiasm towards the concept of mobile payments


Yes, very favourable

Yes, quite favourable

Neither favourable nor unfavourable

No, not very favourable

No, not at all favourable

Don’t know

0% 20% 40% 60% 80% 100%

Average

Other

Sony Ericsson

Samsung

Nokia

Motorola

LG

HTC

Blackberry

Apple



Payment Metrics


What are some of the key findings? (cont.)

4. Key findings from the executive summary include:

• 74.3% of respondents with a mobile phone state that they are aware of the fact that opportunities

to utilise mobile phones to make payments (e.g. via contactless merchant payments and mobile

transfers / wallets) are likely to increase in future;

• however, at a combined 39.5%, those that are either not very favourable or not at all favourable

towards this concept outweigh those that describe themselves as quite favourable or very

favourable, at 31.1% (with the balance of 29.4% not expressing an opinion either way);

• while not necessarily the most widely-held types of payment card, Finaccord’s analysis of card

utilisation indicates that, where held by consumers, charity credit cards, ultra high status credit

cards, supermarket credit cards, football club credit cards and retailer credit or charge cards (other

than those of supermarkets) are the card types that experience the highest rates of usage;

• PayPal has established itself as a dominant provider in the markets for both specialised online

payments and domestic and international remittances, where individuals are paying other

individuals without actually being able to meet them.



Payment Metrics


What is the cost and format? (1)

Payment Metrics: Consumer Attitudes towards and Usage of Traditional and Emerging Means of Payment

in the UK is available as a standard Adobe Acrobat PDF document. The prices for this title in its entirety,

individual chapters within it and other UK consumer research titles available at the time of publication are

as shown in the table below.

PAYMENT METRICS REPORT / CHAPTER

Payment Metrics - total report

within which

Payment Types - individual chapter

Payment Cards - individual chapter

Loyalty Programs – individual chapter

Insurance and Assistance - individual chapter

Mobile / Contactless Payments - individual chapter

Online Payments - individual chapter

Domestic / International Remittances - individual chapter

PRICE *

GBP 1,995

GBP 295

GBP 595

GBP 295

GBP 295

GBP 595

GBP 145

GBP 295

For UK-based clients, VAT at the prevailing rate will be added to the basic price.

Costs quoted are for a single site user licence only.

For a corporate user licence, please see the next slide for further details.

Invoices can be paid in EUR, at the prevailing exchange rate, if preferred.

PRICE * OTHER REPORTS

Aggregation Metrics

Assistance Metrics

Channel Metrics - overview report

Channel Metrics - individual briefing

Mobile Metrics

Partner Metrics

Risk Metrics

Travel Metrics

Warranty Metrics

GBP 1,795

GBP 995

GBP 2,995

GBP 395

GBP 595

GBP 1,995

GBP 1,995

GBP 595

GBP 995



Payment Metrics


How can the research be purchased?

Simple. Just go to the relevant area of the Finaccord web site available at

www.finaccord.com/order_uk_payment_metrics.htm and fill in the online order form, clearly

indicating:

• report required

• type of corporate user licence, if required *

• billing name

• address and e-mail address

• purchase order number, if applicable

Please allow up to one working day for the delivery of electronic copy by e-mail.

* For the corporate user licence please choose one of the following options:

1. One office, one country: no supplement over and above basic cost of reports ordered

2. Multiple offices, one country: additional 20% over and above basic cost of reports ordered

3. Multiple offices, two to ten countries: additional 50% over and above basic cost of reports ordered

4. Global (unlimited offices in unlimited countries): additional 100% over and above basic cost of reports ordered

VAT at the prevailing rate will be added to the price of any corporate user licence acquired by UK-based buyers.



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Payment Metrics - · PDF fileThis report titled Payment Metrics: ... American Express Lloyds TSB Samsung ... Blackberry, HTC, LG, Nokia, Samsung)