Young consumers embrace m-commerce

05 October 2010

PARIS: A majority of young consumers around the world would be interested in using their mobile phone to pay for products.

Alcatel-Lucent, the communications giant, interviewed 226 people aged 18–26 years old in ten countries, including Brazil, China, Japan, Mexico, Germany, the UK and US.

It reported that 81% of participants were "interested" or "very interested" in employing wireless handsets as a "wallet" linked to bank accounts and loyalty cards.

A further 80% suggested they would happily use a phone as the main way of completing transactions, replacing credit cards and their equivalents.

Some 48% of those polled had already bought a ringtone in such a fashion over the last 12 months, falling to 31% for bus or train tickets and 29% for parking services.

Convenience and portability are likely to be the drivers of uptake in this area, alongside providing an integrated system to organise consumers' financial lives.

More specifically, 89% of respondents hoped to buy film tickets without waiting in line, 86% cited a preference for checking their balance in real time and 85% wished to pay for public transport.

Meanwhile, 81% expressed a desire to receive location-based money-off vouchers, and 74% agreed regarding coupons based on previous spending habits.

Overall, 89% of the panel stated a willingness to meet a fee for utilising a mobile phone in this manner, with the average acceptable amount standing at $7.77 (€5.67; £4.91) per month.

Security ranked as the number one concern, particularly relating to the safety of personal financial information.

Elsewhere, only a third of contributors would like their bank to primarily offer mobile payment services, opening the door for mobile network providers, Alcatel-Lucent said.

The advantages of m-commerce for brand owners encompassed creating new revenue streams, such as via SMS and the mobile web.

Moreover, the measurability of this medium, similar to the internet, could yield valuable intelligence into consumer behaviour.

Greater "stickiness" may also result as companies extend and enhance their relationships with customers on an increasingly important channel for almost all categories.

As many emerging market shoppers do not have access to official bank accounts, micropayments through this route should strengthen the position of advertisers in developing economies.

Equally, mobile networks might reduce churn if they are able to secure the confidence of subscribers, the report argued.

Toon Coppens, director, product marketing for Alcatel-Lucent's Mobile Wallet Service, predicted this model could be a key tool in the future.

"[It allows] mobile operators to deliver mobile payment and marketing programs including, person-to-person payment, personalised … coupons and m-commerce services to their end-customers," said Coppens.

Data sourced from Alcatel-Lucent; additional content by Warc staff