The mCommerce and mBanking Landscape in the UK and US

April 2021

Fintech & Payments

James Moar

Research Analyst

Digital commerce and financial services have become a vital part of many consumers’ lives. Uses of digital technology for banking, remote payment and in-store payment have rapidly become the norm; aided in no small part in 2020 by the COVID-19 pandemic. 

In December 2020, we surveyed online consumers in the UK and the US aged 18 and over on their use of, and attitudes towards, contactless payments, mobile banking and mCommerce (smarpthone-based remote purchasing). What follows is a summary of one of the key areas of the research: consumer expectations around mobile banking and mCommerce in the US.

The vast majority of those who shop using a smartphone do so using an app, and of those who do use a browser, 58% report also using apps. Retailers need to engage the app ecosystem in order to develop their mobile shopping experience, with mobile browser-based commerce something that only a minority of shoppers engage in. This also means that online shopping will get increasingly concentrated in the coming years. The apps that people use are centred around a few key vendors, although none are dominant. Amazon is, unsurprisingly, the most popular app.

One of the key promises of mCommerce is convenience, which is often hampered by the need for security and authentication in order to prevent fraud. However, 66% of US consumers are happy with the amount of authentication they encounter, with most users happy with the level of checks they encounter in their mCommerce journey, regardless of how many they undergo (see figure 2). In addition, consumers who want more checks always outnumber those who report that there are too many, regardless of the level of authentication they actually encounter.

Mobile banking enables a wide range of activities to be conducted over a smartphone, but banks need to provide simple services for three activities in particular, with the rest being ‘nice to have’. This is particularly vital for those smaller banks and credit unions in the US that do not have many resources to spend on digital expansion. This is true regardless of the banking channel that is used. Bank switching is relatively uncommon, but among those that do switch, digital-only banking is becoming increasingly popular; while only 23% of people are considering switching banks, 65% of those are likely to switch to a digital-only bank. However, these consumers are not necessarily going to be won over by digital features. The most popular reason for switching is sign-up benefits (35% of likely switchers), followed by better rates (31%). This means that digital-only banks must not neglect banking fundamentals for their products; appealing on a financial level as well as creating appealing digital experiences and features.