Last week, PayPal, the payments platform, announced plans to sponsor three sports teams—the Phoenix Suns, Phoenix Mercury and the Spanish soccer team Real Club Deportivo Mallorca—as part of a broader plan to overhaul three stadiums with mobile payment systems. The promise, according to Phoenix Suns CEO Jason Rowley, is “to create the most efficient and seamless experience as possible.” That could mean less time in line buying a jersey or ordering a hot dog without taking out your wallet.

“It’s not about changing consumers’ behavior; it’s about meeting them where they are and where they want to be,” said Robert Clarkson, PayPal’s gm of North America. “The consumers are already experiencing something like that in some aspect of their life, and now you’re making it available in the sports arena.”

While credit cards are still king in the U.S., the use of mobile payments is growing as companies including PayPal, Apple, Samsung and Google have integrated their mobile payment technology into everything from phones to watches. Meanwhile, banks—seeing the changing landscape—have been forging partnerships or making their own tech to get ahead of changing consumer habits.

Even as larger companies follow smaller startups onto mobile payment platforms, much of the potential for adoption will be driven by medium-size businesses, said Jesse Dorogusker, Square’s hardware product lead. He said other markets such as Canada, the U.K., Australia and Japan are already seeing higher rates of contact-less payments.

“American consumers have been relatively well protected by their banks,” he said. “Even in a well-striped world, and that led everyone to upgrade—and that led the U.S. to miss the greatest movement.”

Even as mobile payments become more popular, growth is still slow in the U.S. According to new research from eMarketer and Accenture, only 25.3 percent of smartphone users 14 years and older will use mobile payment this year for point-of-sale transactions—a 14.5 percent increase from 2017. And while growth is expected to increase through 2022, it won’t be fast. In fact, eMarketer predicts a 12 percent increase to 27.4 percent of the smartphone population in 2019, followed by a 9 percent increase to 29.3 percent of consumers the following year. (Among millennials, that number is expected to climb from 44.2 percent this year to 56.7 percent in 2022.)

However, it’s not all tepid enthusiasm: 23 percent of respondents in Accenture’s survey said they’d give up their mobile banking app for an all-in-one digital wallet.

“Consumer habits die hard,” said Forrester analyst Brendan Miller. “And we’re used to pulling out credit cards at the point of sale, typing in our credentials online and so it’s not top of mind to use these methods at all.”

The timid growth isn’t stopping banks from getting ahead of where they think consumers are heading—toward mobile banking. At Bank of America, 25 million of the bank’s 36 million digital customers now use the app. Meanwhile, at least 3 million are using its virtual AI assistant, Erica, whose user base has doubled every month for tasks such as searching transactions and viewing upcoming bills. The bank also has 4 million users for Zelle, the peer-to-peer app owned by Early Warning Services, which was created by BofA, Capital One and Wells Fargo. In fact, mobile deposits now outpace those submitted at one of the bank’s branches.

“To us, that’s really the tipping point where that is happening,” said Bank of America CMO Meredith Verdone. “We’re there.”

Bank of America isn’t the only financial institution that’s experiencing growth in the payments sector. In the second quarter of this year, about 100 million transactions took place on the Zelle Network totaling around $28 billion in payments. That’s a 17 percent quarter-over-quarter increase in transaction volume, along with an 11 percent increase in total value. (In its first year, which finished in mid-June, Zelle had a total of 320 million transactions worth $94 billion.)

Growth of mobile payments doesn’t mean branches will be shut down en masse. Jason Alexander, head of digital platforms for JPMorgan Chase, said the adoption of mobile payments is slower in the U.S. because of this historically higher trust consumers put in the banking system compared to other parts of the world. However, as adoption grows, he said Chase digital and in-person banking can be complementary rather than competitive.

“The difference in the past five years is the degree to which technology is in the strategy,” he said. “We need to have an opinion with 5G. We have to have an opinion with blockchain. With payments and wallets. This is a dynamic period of time. And with JPMorgan Chase, we explore areas and when we roll into it, we roll into it hard.”

 

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