Online Payment Adoption Slows After Years of Growth

Overall, mobile payment adoption, after surging in previous IDC surveys, appears to have reached a point of slower growth.

After several years of growth in the use of emerging payment methods like prepaid cards and mobile payments, a new survey saw a small decline in online bill payment as well as both network-branded and store branded gift cards, according to a report from IT research firm IDC.

The report, which polled U.S. consumers in regard to emerging payment methods and technologies, also revealed an increase in mobile payments, but it was small compared with recent trends.

"After several years of growth, the market for 'alternative' payment methods is now entering a period where adoption gains may come more slowly and where simply providing an alternative isn't enough. Instead, providers need to offer products that add value beyond the payment," James Wester, practice director for IDC’s Worldwide Payment Strategies and the author of the report, said in a statement.

Of those who reported using mobile payments, PayPal Mobile is still the most frequently used mobile payment method. PayPal was used by more than half of respondents (58.6 percent) in IDC Financial Insights' 2014 Consumer Payments Survey, ahead of both Amazon Payments and Apple's iTunes, which remained at around 40 percent.

Overall, mobile payment adoption, after surging in previous surveys, appears to have reached a point of slower growth. Approximately one-third (37.2 percent) of respondents reported using a mobile payment method of some kind, but that is a relatively modest gain over the last survey.

Meanwhile, online bill payment continues to see strong overall adoption, though usage has decreased slightly for a second year in a row. Nearly three-quarters of consumers (70 percent) reported using electronic bill payment, either directly through a biller's site or through a consolidator like an online banking site.

In a recent report designed to help financial institutions assess their level of maturity in big data and analytics (BDA) against market and industry benchmarks, IDC found a majority of financial enterprises (67 percent) present a "repeatable" level of BDA maturity overall, the third level of IDC Financial Insights' five-level BDA maturity model.

With 12 percent of financial enterprises falling one maturity level below and another 21 percent falling one maturity level above the majority, the emergence of BDA "haves" and BDA "have nots" is likely, making BDA a defining aspect of competitive advantage in a shorter time than previously expected, the report noted.

"In-market adoption of big data and analytics has reached the point where the capabilities and applications these technologies enable are becoming main stream for a growing number of financial services firms," Michael Versace, research director of IDC Financial Insights, said in a statement. "Yet many do not yet have a set of completely mature BDA competencies across the five critical dimensions that are necessary to effectively reduce execution risks and compete with strong business, technology, and operational value propositions."