Credit Card Monitor Q2 2013

Transcription

1 Credit Card Monitor Q Bonus Report: Mobile Wallets & the Potential Consumer Roadblock to NFC Advance Greg Weed Mark Sutin

2 Table Of Contents Page I. Introduction 3 II. Conclusions 4 III. Detailed Findings A. Awareness and Use 5 B. Likelihood of Using a Mobile Wallet 6 C. Likelihood of Using a Mobile Wallet by Generation Segment 7 D. Continued Usage Interest Among Mobile Wallet Users 8 E. Preference for PIN Over NFC or Barcode Scanning 9 F. Preference for PIN Viewed Across Generation Segments 10 G. The Mobile Wallet as a Rewards Card Manager 11 H. Linking Debit or Credit Cards to a Mobile Wallet 12 I. Preference for Linking Credit vs. Debit Cards to a Mobile Wallet 13 J. Preference for Linking a New vs. Existing Credit Card Account 14 K. Provider Consideration Among Likely Mobile Wallet Users 15 2

3 Report Objectives and Scope In the Q Credit Card Monitor survey, a special section of the questionnaire addressed cardholder attitudes, usage, interest and preferences regarding mobile wallet apps for a smartphone. The total Q sample (3,013 respondents) were shown a concept description (below) which served as the basis for answering a series of questions. The purpose of this report is to present key findings from the mobile wallet section of the Q CCM survey. Survey Description of a Mobile Wallet App New apps are being introduced that turn your smartphone into a mobile wallet. These apps can link your smartphone to your payment card accounts so you can make purchases with your phone instead of a plastic card. With a mobile wallet app, in-store coupons, promotions and deals can be redeemed at the time of purchase. 3

4 Likelihood of Using a Mobile Wallet The level of interest in using a mobile wallet is relatively low with only 6% of all cardholders indicating they were highly likely to use it (rated a 9 or 10 on a 10-point scale). In contrast, the complete lack of interest in using a mobile wallet is significant with 46% indicating they were not at all likely to use it (rated a 1). How likely are you to use a mobile wallet app? Extremely Likely (10) 9 Rating 8 Rating 7 Rating 6 Rating 5 Rating 4 Rating 3 Rating 2 Rating Not at All Likely (1) 3% 5% 3% 6% 12% 5% 5% 10% 6% 8% 11% 26% 9% 4% 7% 16% 9% 6% 46% 8% 62% 9% 24% 20% 39% 41% Likely (Top 3 Boxes) Neutral (Middle 4Boxes) Not Likely (Bottom 3 Boxes) All Cardholders Smartphone Owners 4

5 Preference for PIN over NFC or Barcode Scanning One-half prefer entering a PIN for authentication. Among those preferring PIN authentication, a majority prefer to enter the PIN on a merchant terminal (as in a PIN debit transaction). Others would prefer to enter a PIN on the smartphone. If you were to use a mobile wallet to make a store purchase, which method of making the transaction is most appealing to you? No Opinion Base: All Cardholders 19% 17% NFC: Tap your phone against a merchant s tap and pay terminal PIN: Enter your PIN on the merchant terminal and press the appropriate icon on the merchant s screen 28% 21% 15% Scan Barcode: Have the merchant scan a barcode on your smartphone s screen 49% PIN (Total) PIN: Enter your mobile wallet PIN on your smartphone and press the Pay button on your screen 5

6 Credit Card Monitor Q Feature Analysis: Credit Card Ownership Lifecycle The Newbies, The Mature, and The Dearly Departed Greg Weed Mark Sutin

7 Table Of Contents Page I. Credit Card Monitor Introduction 3 II. Q Market Synopsis 5 A. Total Consumer Card Market 6 B. Affluent 7 C. Mass Market 8 D. Millennials 9 III. Feature Analysis: Card Ownership Lifecycle 10 A. Objectives, Methodology, Scope & Relevance 11 B. Summary & Implications 12 IV. Detailed Findings 14 A. New vs. Established Accounts 15 B. Wallet Position of New Accounts 21 C. Reasons for Opening & Closing Accounts 26 D. Cardholder Churn Segments 37 7

8 I. Credit Card Monitor Introduction The 2013 Credit Card Monitor is both a new and an established product. Beginning in 2002, Phoenix has been tracking card ownership and usage behavior with survey waves being conducted throughout the year. Beginning in Q1 2013, Phoenix has maintained the tracking component to the survey while adding new and expanded content areas. This Market Synopsis report, which is updated quarterly, provides current data based on 3,013 interviews completed in the 2 nd quarter. CCM Sample Composition & Quality The Feature Analysis in this report is based on 6,016 interviews completed in the 1 st Half of Card Ownership Lifecycle The Newbies, the Mature and the Dearly Departed focuses on account acquisition and attrition while also examining wallet position of new accounts. Also included in the Q Credit Card Monitor deliverable list will be a Bonus Report on mobile wallets, which will be published separately. This report will be based on data collected on Q Consumers owning a GP credit or charge card for personal use who: HH financial decision makers Make all or most HH purchases and pay all or most HH bills Majority of respondents have their credit cards and last month s statement at time of survey. Multiple quality control measures to eliminate suspect and professional respondents. Demographically balanced sample to align with benchmark data from US Census and the Phoenix Consumer Payments Monitor survey. 8

9 B. Affluent Customers 23% of HHs 47% of Spend Affluent cardholders (HHI $125K+ or Investable Assets $250K+) spent more heavily in the 2 nd Quarter compared to the previous quarter. A minority of affluent cardholders revolve balances. However, affluent revolvers have allowed balances to accumulate for the fourth consecutive quarter introducing a new level of risk to this segment. Average Monthly Spend (Per Card-Owning HH) % HHs Revolving & Average-Month HH Balances (Among Revolvers) Planned Future Spend (Net Change Next 3 Months) $2.2 $2.2 $2.1 $2.3 $2.7 ($000) ($000) 45% 45% 48% $3.3 $3.7 $4.6 $6.5 28% $8.4 31% -5% 1% Q2 Q3 Q4 Q1 Q Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q Arrows=Significant Difference vs. Previous the 95% Confidence Level 9

10 B. Affluent Customers (cont.) Affluent cardholders (HHI $125K+ or Investable Assets $250K+) spent more heavily in the 2 nd Quarter compared to the previous quarter. A minority of affluent cardholders revolve balances. However, affluent revolvers have allowed balances to accumulate for the fourth consecutive quarter introducing a new level of risk to this segment. Card Churn* 2013 Action Q1 Q2 Q3 Q4 Have Opened Card 19% 23% Have Closed Card 9% 10% 2013 Key Metrics Q1 Q2 Q3 Q4 Card Power Score (Index to Tot. Market) Customer Care (Primary Card) 59 (105) 57 (102) Share of Total Spend 72% 68% Plan to Open Card 8% 11% Customer Engagement Plan to Close Card 11% 8% Problem Intensity Score (Index to Tot. Market) 56 (104) 35 (97) * Have Opened or Closed = Past 12 Months / Plan to Open or Close = Next 3 Months Arrows=Significant Difference vs. Previous the 95% Confidence Level 10

11 Credit Card Monitor Overview Research Insights for the U.S. Credit Card Market Large Consumer Sample (3,000 per quarter) Feature Synopsis Affluent & Young Adult Oversamples Broad Issuer / Portfolio Coverage Wide Ranging Content Coverage Proprietary Client Questions Quarterly Hot Topics in Each Report Problem Intensity Index by Issuer Senior Consultative Research Support Membership includes ongoing support from Phoenix s team of senior consultative researchers for additional data analysis by competitors, proprietary segments, etc. Historical Data We have 10+ years of historical data for all essential card usage metrics. 11

12 Credit Card Monitor Overview Details The combination of our large quarterly sample and comprehensive survey content provides our clients timely insights into the credit card market overall, their own portfolios, and those of key competitors. 800 Affluent Oversample / Qtr. Understand the needs and behaviors of this profitable segment. 500 Young Adult Oversample / Qtr. Identify the keys to developing relationships for future growth. Large Sample of 3,000 / Qtr. Over 190 Issuers + Sub- Portfolios Track your performance and that of key competitors. Critical Marketing Topics Ownership &behaviors by card, card features, rewards, attitudes, etc. Proprietary Client Questions Quarterly opportunity for clients to include their own questions. Comprehensive Survey Content Hot Topics Includes card marketing effectiveness, electronic wallet, acquisition deep dive, & needs analysis. Problem Intensity Index Each quarter, we collect key data around problems including incidence, type, handling, and perceived magnitude by issuer. We use this data to develop a Problem Intensity Index for the industry overall, and comparative measures for issuers. 12