Sue Feng, firstname.lastname@example.org, 010-5912-9195
With more functions and better user experience, consumers claim third-party payment rivals mobile banking services
Shanghai — Dec 26, 2013 — More than 86 percent of Chinese consumers in an online survey, whether they have experience using mobile remote payment apps or not, say they would either increase (86% of the total with experiences of using such apps) or try (87% of the total without experiences of using such apps) using such apps in the future, according to a new study by Nielsen, a leading global provider of information and insights into what consumers watch and buy.
“Thanks to the deeper penetration of the Internet and smartphones among Chinese consumers, we are optimistic about the future of the mobile remote payment market in China,” said Georgia Zhuang, vice president of Nielsen China.
According to Nielsen’s Mobile Consumer Report issued earlier this year, China (66%) ranks second among the 10 surveyed countries in terms of the smartphone penetration, following South Korea (67%), and ahead of quite a few developed markets such as Australia (65%), Italy (62%), the U.K. (61%) and the U.S. (53%). And regarding the use of smartphone applications, Chinese consumers are only behind South Korean consumers in app downloads, mobile shopping (shopping via mobile phones) and mobile banking.
“With mobile Internet users taking up 78.5 percent of China’s population of 591 million Internet users, banks in China should quickly catch up with the instant changes of China’s consumer market and learn how to offer good and competitive financial services via the emerging mobile channels, so as to succeed in this dynamic market with huge potential,” Zhuang added.
Low transition rate from bank customers to mobile banking users
According to Nielsen’s Syndicated Report on Mobile Payments, which is based on an online survey of more than 2,000 respondents from 13 cities across China, shopping (34%), third-party payment (34%) and payment via mobile banking apps (30%) are the three most popular commercial applications of remote mobile payment among Chinese consumers.
Despite the existing business relations the banks have with its clients, the transition rate from bank clients to mobile banking users remains lower than 20 percent for all of the Big Five stateowned banks, while the China Merchants Bank, as China’s leading commercial bank, claimed to enjoy the highest transition rate of 27 percent.
“It’s imperative for banks to increase their mobile banking users so as to capitalize on the great momentum of mobile remote payment in China, through which deals totaling 147.2 billion yuan were sealed in 2012,” said Zhuang.
According to the survey, the mobile remote payment market in China is far from being fully tapped, as only 10.1 percent of the surveyed respondents said they have paid remotely from their mobile devices.
Third-party payment: banks’ biggest rival
And the competition isn’t just coming from other banks. Thanks to the rapid development of Ecommerce in China, third-party payment providers have become a competitive rival in the mobile remote payment market.
As one of China’s leading third-party payment service providers, Alipay App enjoys a 34 percent download rate, far beyond the 14 percent download rate of the mobile banking app of the Industrial and Commercial Bank of China (ICBC), which has the most customers throughout China.
As shopping (73%) has become the most favored function for mobile remote payment apps, the third-party payment, thanks to its information transparency between buyers and sellers, is more welcomed among Chinese consumers.
And from the user experience perspective, Chinese consumers also favor third-party payment apps over mobile banking apps, especially in the areas of easy use (58% vs. 50% for mobile banking apps), more applicable functions (59% vs. 50% for mobile banking apps) and access to good deals (47% vs. 38% for mobile banking apps).
Source: Nielsen’s United Report on Mobile Payment
More functions and better user experience are keys for mobile banking apps to catch up Nielsen’s research revealed that compared with mobile banking apps, whose function is mainly limited to bank account management (81%) and credit card account management (60%), thirdparty payment apps have an advantage because they offer of a wide range of functions ranging from financial account management such as credit card management (62%), bank transfer (59%), shopping (73%) and necessary payment for other living expenses (65%).
Slow speed (30%), complicated process (24%), few discount information (24%) and inconvenience in information-check (24%) were the key complaints from consumers about remote mobile banking apps.
“As third-party payment services increase their market share in areas like credit-card payments, online financing and other innovative services beyond online shopping, Chinese banks should take a more open attitude in seeking for cooperation with the other counterparts to meet consumers’ increasing and more diverse needs, such as the function of cross-bank credit card management, which has been realized by third-party payment,” said Zhuang.
One-shop mobile banking starting from heavy users
Nearly two-thirds of the survey’s respondents who have downloaded mobile banking apps said they use mobile banking services at least twice every week, with the consumers aged between 25-29 most frequent users. More than 80 percent of the respondents who have downloaded thirdparty payment apps said they use the apps at least twice each week, and those aged between 25 and 34 are the most frequent users.
Also, according to Nielsen research, respondents aged between 35 and 39 spend an average of 1,098 yuan per month on mobile devices. Most of these consumers are well educated and are the most heavy-spending group, spending an average of of 1,263 yuan each month. Shopping (69%), paying the fees (51%) and group purchase (48%) are the top three functions for the surveyed consumers who’ve downloaded the mobile remote payment apps.
“In order to attract more users to mobile banking services, the banks could think of developing one-shop mobile remote payment service especially for those heavy users of mobile remote payment, who usually have stronger demand for more diverse and personalized services,” Zhuang added.
About Nielsen’s Syndicated Research Report on Mobile Payment
Nielsen’s Syndicated Research Report on Mobile Payment surveyed a total of 2,038 mobile payment users from a base of more than 18,000 online consumers aged between 18 and 54 in 13 cities throughout China. The report shared key insights on mobile payment consumers’ behavior, user experiences and expectations for mobile payment apps, and suggestions for product optimization and development.
Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence and mobile measurement. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA, and Diemen, the Netherlands. For more information, visit www.nielsen.com.