Wednesday, June 29, 2016

More than 25% of U.S. smartphone owners use payment apps at least once a month

Research firm finds retailer-specific apps more commonly used than both Apple Pay and Android Pay

Parks Associates released new research today showing more than 25% of U.S. smartphone owners use payment apps at least once a month. Context is King: Monetizing Consumer Data for Commerce finds more than three million retailers combined accept Apple Pay and Android Pay, but consumers currently prefer retailer-specific apps, such as the Starbucks payment app, which accepts five million transactions per month. These large retailer apps are able to control all aspects of the payment app experience within their stores.

“Current vendors of digital wallet solutions are promoting in-store payment as a major value proposition for consumer adoption, but retailers large enough to create their own solutions are currently winning most of the adoption,” said Harry Wang, Senior Research Director, Parks Associates. “Retailers are hesitant to embrace other payment apps due to four main issues: high upgrade costs of point-of-sales payment terminals; payment apps acting as gatekeepers to their shoppers’ data; shoppers’ confusion with various mobile payment options; and slow checkout speeds using payment apps vs. credit card swipes.”

Use of Payment Apps

Context is King: Monetizing Consumer Data for Commerce notes consumers use payment apps mostly for purchasing food and drink, clothes, and tickets for events such as concerts. By supporting payments in these three areas, app developers can reach almost 75% of current payment app users in the U.S., and new digital wallet app developers who targeted this opportunity with loyalty-program wallet apps have had varying degrees of success. Key Ring, for instance, boasts 12 million users for its free namesake app. The company has forged marketing agreements with major brands to serve targeted ads on deals or deliver digital coupons using location-based targeting.

“Although mobile payment complements mobile wallet use nicely, the ability of the mobile wallet to serve as a marketing tool shouldn’t be dragged down by slow development of the mobile payment industry,” said Chris Tweedt, Research Analyst, Parks Associates.

The most dominant payment app is currently PayPal, which is used by one in five smartphone owners. PayPal boasts an active user base of 179 million worldwide and leads not only in user adoption but also in user spending. Its payment app with the One Touch payment capability is adopted by 7 million consumers and accepted by one million retailers.

For more information about Parks Associates research, contact To schedule an interview with an analyst, contact Holly Sprague at

About Parks Associates: Parks Associates, a woman-owned and woman-led internationally recognized market research and consulting company, specializes in emerging technology solutions serving the consumer and small to medium business (SMB) markets. Celebrating its 35th year in 2021, Parks Associates is a partner to companies navigating the changing consumer technology landscapes through data-driven market insights, extensive consumer and industry intelligence, custom marketing services, and executive networking experiences and conferences.

The company's expertise includes home automation, control systems and security, digital media and platforms, entertainment and gaming, home networks, internet and video services, connected health and independent living solutions, mobile applications and services, support services, consumer electronics, and energy management solutions.

Each year, Parks Associates hosts industry webcasts, the CONNECTIONS™ Conference Series, Connected Health Summit, Smart Energy Summit: Engaging the Consumer, and Future of Video: OTT, Pay TV, and Digital Media.

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