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The expansion of JP Morgan’s mobile banking goes quiet

By on July 15, 2016

With 24.8 million mobile banking users, JP Morgan’s explosive growth shows signs of fatigue.

15 Jul 2016 – Business Insider

Slowing growth could indicate that the market is approaching saturation.

The number of JPMorgan mobile banking users grew 18% year-over-year (YoY). But that’s down from the 22% YoY growth the firm posted in Q2 2015. And in Q2 2016, the firm added just 1 million new users to its mobile banking base.

That’s consistent with industry-wide trends, according to BankNXT. A US Federal Reserve survey showed that 53% of US smartphone owners used mobile banking in 2015. That’s up just three percentage points from the 50% posted in 2012, indicating that at the moment, there isn’t anything driving new users towards mobile banking applications.

Mobile payments are becoming more popular, but they still face some high barriers, such as consumers’ continued loyalty to traditional payment methods and fragmented acceptance among merchants. But as loyalty programs are integrated and more consumers rely on their mobile wallets for other features like in-app payments, adoption and usage will surge over the next few years.

Evan Bakker, research analyst for BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on mobile payments that forecasts the growth of in-store mobile payments in the U.S., analyzes the performance of major mobile wallets like Apple Pay, Android Pay, and Samsung Pay, and addresses the barriers holding mobile payments back as well as the benefits that will propel adoption.

In our latest US in-store mobile payments forecast, we find that volume will reach $75 billion this year. We expect volume to pick up significantly by 2020, reaching $503 billion. This reflects a compound annual growth rate (CAGR) of 80% between 2015 and 2020.

Consumer interest is the primary barrier to mobile payments adoption. Surveys indicate that the issue is less the mobile wallet itself and more that people remain loyal to traditional payment methods and show little enthusiasm for picking up new habits.

 

About Kristian Amundsen