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Accenture Payment Services

Influencing Behaviours to Succeed in Everyday Digital PaymentsWhat drives acceptance of new digital payment propositions across the youth demographic to promote and achieve mass-market adoption?

Introduction 3

Context 4

The digital payment acceptance and use framework for the UK 5

Six insights from the framework 6Insight 1 7

Insight 2 8

Insight 3 9

Insight 4 11

Insight 5 12

Insight 6 12

The framework in practice 14

Call to action 16

How Accenture can help 17

2 | EVERYDAY BANK RESEARCH SERIES

As the adoption and usage of digital payments in the UK continue to rise, it is vital for digital payment providers to identify and understand the key factors that make up successful propositions. To date, the drivers behind consumers’ acceptance and use of digital payments have remained unclear—creating a ‘blind spot’ around how providers can influence consumer behaviour.

Payment Service Providers (PSPs) know there is a huge opportunity to provide innovative new ways to pay to support the digital age. However, while such innovations are proliferating, few so far have been runaway successes. Consequently, PSPs, particularly banks, are often unsure how they can persuade customers to adopt new payment methods and migrate them away from familiar and trusted ones such as cash and plastic cards.

On the assumption that the youth is a key customer segment to win over, the burning question becomes: “How can providers achieve success through driving adoption of digital payments across the youth demographic to influence mass market acceptance?”

To answer this question, Accenture commissioned the unique research study described in this paper, with a group of final year students from the University of Bath.

These insights are especially valuable since young consumers are the key to the future success of digital payments—in some ways, they are the ‘gatekeepers’ for the mass take-up of this and other new technologies in our society. What works for them now is a starting point for what will continue to work in the future; and is an inspiration for older demographics (not covered in the research), who are also eager adopters of advanced technologies and innovations.

Amid today’s increasingly fragmented digital payments landscape, we believe that the findings from this study—and our analysis of their implications—will help PSPs of all types to develop winning strategies for influencing consumers to adopt digital payment solutions.

To support this objective, our report includes a ‘digital payments acceptance and use framework’ that pinpoints the key behavioural influencers supported by the research. We have made this framework publicly available so existing and potential PSPs can consult it when designing and developing digital payment service propositions. This framework is underpinned by academic theory and has been validated through empirical rigour from quantitative testing.

As we move towards a ‘cashless society’, the influence of digital payments as a permanent feature of UK life cannot be ignored. For banks and other PSPs, the question is how to shape consumer behaviour to make the most of the opportunities presented. We believe this paper provides an important step towards the answer.

Introduction: digital payment insights from a pioneering behavioural study of 18 – 24 year olds

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Among consumers of all ages, the way people across the UK pay for everyday goods and services is undergoing a profound and permanent shift. With digital payments rising rapidly, the opportunities for PSPs with digital payments propositions are growing apace as the country heads towards becoming a cashless society.

The statistics speak for themselves. In the UK today, three in every four pounds spent in shops are paid for without physical cash1. In July 2014 the ‘tipping-point’ was reached where the number of non-cash payments, including digital, overtook those using physical money2.

The rising penetration of smart mobile devices…A major enabler of this mass migration to digital payments is the rising penetration of Internet-enabled mobile devices. The proportion of people in the UK with access to mobile Internet connectivity rose from 49% in 2013 to 57% at the beginning of 20143. This technological shift has created a stable and increasingly pervasive platform on which a wide array of digital payments solutions are being rolled out.

What’s more, the integration of mobile connectivity into our lives has much further to run. The UK’s ranks of smartphone users are forecast to grow to 43 million by 20174, enabling an ever larger proportion of the population (including toddlers and young children) to experience the benefits of mobile device ownership—boosted by an expanding array of apps—and become more skilful with mobile devices.

…opens the way for social media to drive digital paymentsAs digital payment offerings evolve and gain momentum, forward-thinking PSPs are examining ways to target consumers using pioneering methods that stimulate social identification and interaction. Today’s mobile social media platforms provide banks and other PSPs with a powerful tool for influencing consumers to use digital payment methods, for example by increasing their awareness of the benefits while reducing their perceptions of risk.

The potential of social media to drive take-up of digital payments is underlined by consumers’ constant search for new ways to complete tasks more quickly and efficiently. Previous research5 has found that individuals utilise digital payments for both convenience and speed. Exemplifying these changing behaviours is the relentless rise and mass adoption of contactless payments, with the amount spent rising by 331% across the UK’s 58 million contactless cards in use during 20146. The sheer pace of this shift in consumer behaviour highlights the need for PSPs to understand the drivers behind it.

Success for banks will require consumer insights…Banks and other PSPs have responded proactively to these technological and behavioural changes. Banks have boosted access and availability for customers by rolling out 24/7 mobile banking propositions, leveraging pre-existing consumer trust in an effort to meet demand in the increasingly digital banking market. However, given the complexity of this marketplace, understanding the myriad drivers behind consumer behaviour remains vital to success.

This imperative reflects some consumers’ ongoing concerns over digital payments. While the benefits of digital payments for users are clear and widely recognised, winning over non-users requires PSPs to overcome these individuals’ “fears and lack of understanding”—especially over security and fraud. For many consumers, digital payments represent an excursion beyond the unknown into the unknowable. To improve consumers’ propensity to trust digital payment methods, the related risks must be acknowledged and addressed. Significantly, these concerns are less prevalent among younger consumers, as they have more experience with digital payments7.

…with youth pointing the way forwardThis role as the fearless pioneers in adoption and acceptance of digital payments positions the youth segment as important indicators—perhaps even ‘gatekeepers’—of the UK’s advance to the cashless society, with the blend of social influence and technological fluency that will drive take-up and significantly influence other adopters8. The UK is already spearheading Europe’s migration to digital payments, representing 75% of all European digital payments9. This is largely down to the younger demographic: of the 80% of consumers between 16 and 24 who own a smartphone, 41% use it to make mobile payments10.

For existing and prospective providers of digital payment solutions, the message is clear: the youth sector is the first and most important demographic to focus on. A proposition that is perceived as delivering value and achieves widespread adoption among this group will be well-placed to win in the wider consumer market. Conversely, an offering that fails to ‘capture’ young consumers will probably lose momentum and fall away. So understanding the factors and motivations that influence the behaviour of the youth demographic is a prerequisite for success in digital payments.

Context: the UK, an advanced market for digital payments


In light of the critical importance of the youth segment to the future mass-adoption of digital payments, the group of final year students behind this study set out to create a framework to explain young consumers’ acceptance and use of digital payment propositions. Their objective was to expose the elusive and multifaceted mind-set of this demographic (18–24 year olds), in order to increase PSPs’ chances of commercial success in the complex and fragmented digital payments marketplace.

As Figure 1 shows, the framework incorporates seven core constructs as interdependent drivers of consumer behaviour. These are listed below in order of their contributing significance to behavioural intention:

1. Performance Expectancy—the degree to which using a technology will provide benefits to consumers in performing certain activities

2. Trust—the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other party will perform a particular action

3. Perceived Risk—the nature and amount of risk perceived by a consumer in contemplating a particular purchase decision

4. Social influence—the extent to which consumers perceive that important others (e.g. family and friends) believe they should use a particular technology

5. Effort Expectancy—the degree of ease associated with consumers‘ use of technology

6. Hedonic Motivation—the fun or pleasure derived from using a technology

7. Facilitating Conditions—a consumer’s perceptions of the resources and support available to perform a particular behaviour

The seventh driver—‘facilitating conditions’—proved to have a ‘non-significant’ relationship with behavioural intention. Depending on the specific use case of a digital payment proposition, the research confirms that the six remaining drivers should be considered to varying degrees—and in various weightings of relative importance—when specific consumer propositions for the youth segment are being formulated.

By combining this framework with the results of the empirical research into young consumers’ behaviour and the factors influencing it, we have generated six key insights that we believe all developers and providers of digital payment solutions should consult and evaluate.

The digital payment acceptance and use framework for the UK

FIGURE 1. The digital payment acceptance and use framework

• Easy to use• Clear and understandable• Easy provisioning

(e.g. download)

• Are useful in my daily life• Increase my productivity• Help me save time

EXAMPLES EXAMPLESDigital payments:

• Have a high profile• Considered a status symbol• Influence peoples’ opinions of me

• Is trustworthy• Honors commitments• Understands the market

This digital payment provider

• Are very entertaining• Make me feel good• Are enjoyable

Digital payments:

• I feel safe completing transactions• Mobile Internet is robust and a safe• Risk of abuse of billing information

RISK PERFORMANCEEXPECTANCY

TRUST EFFORT EXPECTANCY

BEHAVIOURALINTENTION

HEDONIC MOTIVATION

SOCIAL INFLUENCE

FACILITATINGCONDITIONS(INSIGNIFICANT)

•••

Customer service is available Specialised instructions are available I have the resources necessary to use a digital payment

•••

I intend to continue usingI will always try to useI plan to continue to use

Behavioural intention


Six insights from the framework


Any consumer considering using a digital payment has a number of important factors to take into account. Not the least of these is an awareness of the related risks—including the potential for fraudulent activity, and fears over whether their payment details are safe and secure from criminals seeking to commit financial and/or identity theft. Mitigating the perceptions of these risks is a priority for any company providing digital payments.

Our findingsOur study shows that the rising usage of digital payments by young consumers correlates with a decrease in perceived risks. This indicates that sensitivity to elements of risk can be reduced if the frequency of interaction and usage is increased. However, the perception of risks never disappears entirely. Regardless of experience or use, a baseline of perceived risk always remains, including physical risks such as the loss of a smartphone or contactless card, or technology risks such as the interception of data.

As an example of this insight, the impact of frequent usage on perceived risk is borne out by experience in the UK contactless payments market. There is a perception in the media11 that card clash, where money is taken from cards other than the ones intended for payment, is a danger to consumers; but the actual incidence of this risk has been low and consumers appear unworried, with usage tripling in 201412.

The implicationsThese findings suggest that while some risks may persist, digital payment providers should strive to accelerate usage to reduce consumers’ main worries. Given the strong appeal of digital payments for young consumers undertaking low-value transactions, it’s important for providers to encourage regular use by minimising any usage restrictions, financial or otherwise.

It also makes sense for PSPs to design a new payments proposition so that potential risks are minimal and then disappear with usage—for example, real-time confirmation that a payment has been successfully received by the beneficiary eliminates uncertainty and risk of failed transactions going unnoticed.

Actions for banks and other payment providersProviders must gain a thorough understanding of which risks customers will perceive, and design and market propositions in such a way that perceptions of these risks dissipate with rising usage, as occurred with contactless payments.

PSPs should also extend the customer onboarding process beyond the initial transaction, and treat it as complete only once the customer’s frequency of use reaches a target level.

Insight 1: Frequent successful usage will reduce perceptions of risk over time

“The accidental use of fraudulent websites which imitate legitimate websites. In these situations you could be supplying banking details to unwanted parties or individuals.”

The team of final year students from the University of Bath behind the study

The group of young people involved in this research study included a small core team of final year undergraduates at the University of Bath, and a wider network of 160 peers, friends and online contacts around the UK. The sample for the study was built through a social media campaign, which snowballed as word spread. It follows that the proactive, engaged and participative young consumers who took part in the research are digital payment users and exactly the type of ‘influencers’ that digital payments providers would like to attract.


The fragmentation of the PSP marketplace, interdependencies between different facilitators and regular emergence of new technologies in the digital payment environment can generate a sense of apprehension and insecurity among consumers. To overcome these fear factors, it’s vital that PSPs convince consumers to trust their digital payment offerings from the start.

Our findingsOur study finds that trust is the factor with the second highest influence on young consumers’ behavioural intention to use digital payments. And the level of trust increased over time in the experimental groups using PayPal and Paym, while that in the control group (using only contactless payments) remained static (see later information panel on methodology for an explanation of the approach used). These findings suggest that social influence significantly affects consumers’ initial trust in new digital payment services, especially with an embryonic service at a relatively immature stage.

The implicationsConsumers’ initial experience is vital in generating trust in any digital payments solution—and the triggers for this trust include initial awareness, the customer’s first impression on encountering it, and the social media interactions surrounding the payment proposition. PSPs launching new payment propositions into the digital payments market should not underestimate the power of first impressions, intimate influences and social identification in creating the intense emotional associations that lead to trust and delight in the new proposition.

Actions for banks and other payment providersAs well as ensuring their offerings work first time and every time, digital payment PSPs should look to create initial trust through security mechanisms such as biometrics and consumer alerts. These efforts should include stimulating word-of-mouth conversations about their solutions between friends, including promotions via social media.

Influencing young consumers in this way is important because of their susceptibility to social influence and their lack of experience and trust around PSPs. The key messages PSPs should seek to convey include demonstrating responsibility to protect customer information and applying stringent security measures to maintain customers’ privacy13.

Insight 2: The first impression is vital to building consumer trust

“If a new digital payment is promoted via social networking sites, either through my friends/followers or through the site itself, it would encourage me to test it for myself because it would be evident that they enjoyed using it and trusted it.”

PayPal and Paym

PayPal and Paym were chosen as the digital payments propositions to be used in the study because of their existing relatively widespread consumer adoption. Paym, launched in the UK in April 2014, is a mobile payment system that allows users to transfer cash to each other’s bank accounts using a mobile phone number as a proxy for the bank account number. The PayPal mobile app lets users pay for goods and services in-store, from the table or at the till, transfer money to friends and keep tabs on their balance on the go.


If consumers are to choose to use products and services it is essential they perform as consumers expect them to—first time, every time. In digital payments, even a minimal misinterpretation or misalignment between the performance and benefits that consumers expect, and those they actually receive, can have devastating consequences.

Our findingsAs Figure 2 illustrates, our research shows that ‘performance expectancy’ is the most influential driver behind young consumers’ behavioural intention to accept and use digital payments. It is essential that products and services are either useful in a given context, save time or increase productivity, and if a proposition fails to do so, consumers will reject it.

In their free-form comments, participants frequently mentioned that digital payments solutions have to work impeccably—and that that the reason they use them is down to the fact that they are useful, quick, and that they haven’t experienced any problems with them so far.

The implicationsImpeccable performance against expectations is critical to consumer acceptance. This involves both the experience and value that PSPs lead consumers to expect they will receive, and also the proposition’s ability to deliver against those expectations.

In our 2014 (non-age specific) consumer research on digital banking14, trust was ranked as the number one factor. This implies that although trust may be important overall for digital banking, flawless execution is even more important when making digital transactions, at least for the youth segment.

Actions for banks and other payment providersDigital PSPs must centre their propositions on the benefits and performance they offer. This means testing the customer experience end-to-end across all possible use cases and exceptions, and not tolerating any glitches, confusing customer experiences or errors. The infrequent exception, such as requesting the return of a payment, must be as slick and easy as the core, everyday uses.

Insight 3: Don’t underestimate the importance of impeccable performance

“Time is money—and digital payments save me time.”

FIGURE 2. Relative weightings of drivers contributing to the use of digital payments

35%

16%14%

11%

10%

10%4%

Performance Expectancy

Trust

Perceived Risk

Social Influence

E�ort Expectancy

Hedonic Motivation

Facilitating Conditions


Given youth’s experience of rapid technology innovation throughout childhood, their desire for novel and fun elements is high. To sustain their interest, loyalty and usage as they become more experienced, it is important to re-engage with them and maintain the sense of novelty by continuing to update and refresh the offering.

Our findingsOur study shows that ‘hedonic motivation’ is less of an influence on more experienced users of digital payments products. Synthesising the comments of these individuals unearthed the finding that as consumers become more accustomed and familiar with using them, the novelty wears off and the fun they derive from it fades away. Refreshing the product regularly will counteract this effect.

The implicationsRather than focusing on building the user base by offering attractive deals for new customers, our findings underline the importance of continuing to target existing and experienced consumers of digital payment propositions with new versions, updates and innovations to facilitate the enjoyment of novel things and keep them on board as users.

Once mass adoption is achieved, consumer inertia and familiarity drive continued use (as is the case with traditional credit cards and debit cards). However, maintaining customer engagement beyond current needs is also a way of staying nimble and keeping ahead of the competition. Therefore ongoing development should be planned into roadmaps to sustain customer engagement.

Actions for banks and other payment providersSince switching is easy, and young consumers’ awareness of alternatives and new propositions is high, it is vital for PSPs to sustain ‘stickiness’ through ongoing regular enhancements and customer engagement. These efforts should include leveraging social influence through social networks, to stimulate conversations when disseminating information on new digital payment propositions, and using feedback from these social media conversations to inform new developments. An example of this use of customer feedback is Barclays’ “Your Bank” initiative, which the bank uses to inform new development on its Pingit payment app and its mobile banking app.

Insight 4: Re-engage experienced and loyal customers

“It’s exciting because it’s a new technology and so is fun to use.”


Many PSPs, banks in particular, rely on their extensive infrastructure and well-developed customer service and support capabilities and resources to win and retain customers. But these factors have little influence on young consumers’ use of digital payments.

Our findingsIn deciding to adopt and use digital payments, the young consumers in our study are far more influenced by

the novelty and enjoyment of the user experience than by factors such as customer service. Their proficiency and self-sufficiency in using digital payments make customer support services less relevant to them.

The implicationsThe view of young consumers seems to be that if they need to contact customer assistance to use a digital payments solution, then that solution has already failed. They want propositions to be intuitive and easy to use—and if something goes wrong, they won’t contact a helpline, but will simply stop using the proposition. Even if they do want help, they’ll probably seek it from peers on social media.

Insight 6: Focus on customer self-service and self-proficiency, in preference to customer support services

“I’ve never felt the need to contact customer service after a digital payment. So it seems quite irrelevant to me.”

It’s well known that young males and females are influenced by different factors and nuances in their buying decisions. The same applies to adoption and usage of digital payments offerings—an important insight for PSPs.

Our findingsOur study reveals clear differences between the main behavioural influencers for males and females, with males being far more affected by ‘social influence’ and ‘performance expectancy’ than females, and females being more influenced by ‘trust’ and ‘perceived risk’ than males.

The implicationsThis implies that the rates of adoption of digital payment propositions may not be uniform by gender when subject to the same influences, and that adoption rates could be influenced by marketing messages tailored to each.

Actions for banks and other payment providersThe study shows a clear difference between genders in the factors influencing adoption. While deeper analysis of these differences is required, it’s evident that digital PSPs could use marketing messages to engage males and females in different ways. Messages targeted at males could place emphasis on ‘cool’, through innovative word-of-mouth campaigns, including viral marketing with social media. To win females over, PSPs could put more importance on trust and convenience.

Insight 5: Tailor the approach to marketing, segmented by gender

“It saves a lot of time, it is simple to use, and you look cool using it.”

Actions for banks and other payment providersAlthough customer support is important, this finding indicates that PSPs should be wary of relying on existing customer capabilities to embed support processes into the core of digital payment propositions. For example, real-time confirmation of a successful payment, or clear messages with reasons and actions on unsuccessful payments, are preferable to having to contact a call centre for information.

The research focused exclusively on the youth segment, but it’s clear that to attract and retain young consumers at least as users, digital payments providers should focus on offering full self-service propositions.


These six insights are derived from empirical evidence from rigorous application of academic theory (see information panel on the methodology used). The insights and the digital payment acceptance and use framework are ready to be used by PSPs to design and validate their own digital payment offerings.

The research and the findings apply only to the youth sector, and to the UK, but we believe they provide useful guidance for PSPs in other countries, particular those with similar characteristics to the UK.

For example, there are a small, but growing number of digital payment propositions that have achieved general mass adoption across consumer segments, and on careful inspection we can indeed see one or more of these youth research insights reflected in them.

In Denmark, there is Mobile Pay. Launched in 2013 it has more than two million users out of a population of 5.5 million, processing around 200,000 transactions per day, with an average value of around €33. Although launched by Danske Bank, over half the users are from other banks. Successful characteristics shown by Mobile Pay include:

• Frequent usage by those who download the application

• A first impression that delights—with a user interface carefully designed to minimise the number of steps to make a payment

• Targeted at existing bank customers, specifically those who have the Dankort debit card

• A roadmap of growing capability, from person-to-person, to merchant payments using NFC, Bluetooth and APIs

• Payments can be sent to people without the app—they receive a SMS notifying them, and then can follow a simple process to download the app and receive the funds

• Heavy focus on self-service—a standalone application, easy to download with no requirement to go to an ATM or a branch to register.

In Sweden there is Swish. Launched in 2013, it is a mobile real-time payments app, with one million active users in August 2014, expected to rise to three million by the end of 2015. Initially launched for person-to-person payments it is being extended to ecommerce and POS payments. Part of its success is due to social media—for example on launch15, the media budget was given to bloggers to spend on goods to auction on the Tradera auction site, where the goods sold could only be paid for by Swish. 27,000 auctions resulted. The campaign was supported by social media ads, where for example the click rate on YouTube banners was 18%, well above the 10% expected. The target was 100,000 downloads in the first three weeks after launch, the actual number was 226,000.

In the USA, there is the Starbucks’ mobile payment app. Launched in 2011, by the end of 2014 it accounted for 16% of Starbucks’ US transactions, or seven million payments per week, growing at 50% per year.

The Starbucks’ branded mobile payments app is an example of continuous re-engagement with loyal customers. It was developed from Starbucks’ original proprietary payment and loyalty card, which grew out of a successful loyalty programme itself. The mobile app offers a personalised service, rewarding the most frequent customers with extra benefits, while cutting transaction times by approximately 10 seconds, reducing in-store queuing considerably. Starbucks next step in this customer engagement programme is to add an order-ahead feature.

The framework in practice


The findings and insights from our study point to specific steps for different participants in the digital payments industry—established banks, challenger banks, and emerging non-bank PSPs.

For established bank PSPs• Capitalise on the success of existing

digital offerings which have large customer adoption already, in particular mobile banking, by adding new digital payment capabilities as the next phase in the offering roadmap—thus continuing customer engagement and stimulating fun and novelty.

• Recognise, manage and capitalise on existing consumer trust to compete against alternative providers and smaller entrants that may be perceived as more risky.

• Encourage initial usage by emphasising, and re-using proven, trusted credentials and security features, such as biometrics, from the start; and, using incentives where necessary, monitor and drive up initial usage of individual adopters.

• Take a customer-centric view of risk, and design it out to minimise customer perception of risk—avoid a bank-centric approach.

• Focus on absolute self-service, and avoid designing in legacy customer service processes, including initial application processing.

For challenger bank PSPs• Exploit the lack of legacy systems,

processes and culture to reinvent payments to support digital lifestyles and business models, unencumbered by legacy thinking and practices.

• Use social media extensively to market digital payment propositions virally to gain customers, with imaginative campaigns linked to the challenger brand.

• Focus on repeat-use strategies, not only to build momentum in the adoption of digital payment propositions, but also to transform secondary accounts into primary accounts.

• Concentrate on delivering flawless performance, with continual improvement to the current service to save consumers time and increase their productivity.

• Release frequent proposition upgrades to sustain interest and build an image of a nimble, fresh and innovative bank—for example, growing contactless card adoption that leads to seamless adoption of NFC digital payments.

For emerging non-bank PSPs• Identify niches within the current open

and fragmented digital payments market where you can capitalise on consumers’ expectations of performance.

• Build on existing (banking) payments infrastructure with overlay services and new offerings that stimulate novelty and enjoyment.

• Use social media as a tool to reach and influence consumers, with fun, cool, quirky campaigns that grab attention and encourage usage.

• Exploit technology to differentiate from banks with a pure and different digital experience, reducing perceived risks through robust security and resilient performance—keep it simple initially, focusing on ongoing development to introduce new features such as a loyalty and offers later.

• Create a fantastic first impression for new users and focus on a follow-through strategy to incentivise repeat usage.

Above all, the findings show that demand for digital payments is high in the youth sector. Those in the survey who were introduced to Paym and to PayPal loved them. Each of these research groups saw unambiguous increases in usage and trust and drastic reductions in perceived risk.

PayPal has been growing strongly for over a decade and is a huge commercial success in many countries. In contrast, Paym has been in operation in the UK for only a year, but has barely been advertised or promoted by UK banks—there is significant opportunity alone for UK banks with access to Paym to promote it to the youth sector on social media; and for banks in other countries to develop similar addressing capabilities to support digital payments.

There is little to lose from launching digital payment propositions, and much to gain, in terms of customer engagement and, in turn, customer numbers. Rather than fretting about whether customers will use new digital payment types, whether heavy investment is needed to do so, and whether every part of a network needs to be in place before launching, PSPs should focus on the six insights and the acceptance and use framework described here.

Get these right, and success through mass adoption beckons.

Call to action


How Accenture can help

Accenture can help banks and other market participants navigate their way successfully through the complex and fast-evolving digital payments marketplace, thanks to our strong set of skills, assets and capabilities honed through our own transformation to digital.

At Accenture, we are continuously developing our own ecosystem of digital assets, accelerators, strategies and capabilities to help banks and payment providers become leaders in digital payments. To support and accelerate our clients’ progress along their digital payments journey, whether you are an established bank, a challenger bank or a non-bank PSP. We are here to help you with our expertise in digital strategy, systems integration, mobility, analytics, interactivity, and delivery. Above all, we would be excited to help you launch and grow new digital payments propositions.


The research study on which this paper is based was conducted by a team of final-year undergraduate researchers at the University of Bath in the UK, utilising an optimal sample size of 160 consumers aged between 18 and 24 years old16 to achieve statistical validity. The objective was to track and record—over a six-week period—the changes in participant’s behavioural perceptions, acceptance and use of digital payments17, and to identify the factors that contribute to higher take-up and usage.

The respondents represent a broad cross-section of UK youth from various regions, with 66% being students, 25% in full-time employment, 8% unemployed and the remaining 1% in secondary education. Apart from age, the common denominator across the respondents is that they were all actively using contactless debit or credit cards as a pre-requisite for the research.

The first step was a thorough review of existing research literature and seven alternative survey models. The team selected the Unified Theory of Acceptance and Use of Technology 2 (UTAUT218) as the base research model because it encapsulates consumer and social context of the research and overcomes numerous limitations of other research models. The team then tailored the UTAUT2 model to the research context by replacing two drivers, ‘price value’ and ‘habit’, with the drivers ‘trust’ and ‘perceived risk’.

The study consisted of two surveys across three experimental groups within the sample, each of roughly equal size, with a six-week break to test the change in their perceptions. A control group continued to use basic contactless payments cards throughout the period, while one of the other two groups was introduced to Paym19, and the third group to PayPal. At the end of the period, a second (longitudinal20) survey examined variables within each group, such as ‘usage’, ‘trust’ and ‘perceived risk’, enabling comparisons with each other over time. Additional variables, such as ‘performance expectancy’, ‘social influence’, ‘effort

expectancy’, ‘hedonic motivations’ and ‘facilitating conditions’ were assessed in the second survey (as outlined in the framework in Figure1).

In Accenture’s view, this unique study provides deep and new insights into the factors that drive the adoption, use and commercial success of digital payments propositions in the youth segment. As such, we believe it can make a major contribution in informing both bank and non-bank PSPs on the behavioural aspects of their digital payments propositions and market strategies.

Research methodology and sample: a unique study of youth by youth

13%

1%

2%

3%

14%

14%

5%

4%

3%

3%

6%

14%

11%

5%4%


1 The UK Cards Association, 2014. UK card spend tops £0.5 trillion for first time as consumers switch from cash [online]. London: The UK Cards Association. Available from: http://www.theukcardsassociation.org.uk/news/UKCardPayments2014.asp [Accessed 31 November 2014].

2 Payments Council, 2015, Cash overtaken by ‘non-cash’ payments in 2014. Available from: http://www.paymentscouncil.org.uk/media_centre/press_releases/-/page/3237/ [Accessed 16 June 2015].

3 Ofcom, 2014. The Communications Market Report. UK: Ofcom.

4 Statista, 2015. Smartphone Ownership Penetration in the United Kingdom (UK) in 2013-2014, By Age [online]. UK: The Statistics Portal. Available from: http://www.statista.com/statistics/271851/smartphone-owners-in-the-unitedkingdom-uk-by-age/ [Accessed 31 January 2015].

5 VocaLink, 2013. Mobile usage: Attitudes and payments research report 2013. Rickmansworth: VocaLink, (14017327220513).


7 VocaLink, 2013. Mobile usage: Attitudes and payments research report 2013. Rickmansworth: VocaLink, (14017327220513).

8 Hauge, A., 2005. Gatekeepers and knowledge diffusion in the fashion industry. Druiddime Academy Winter 2006 PhD Conference, pp.1-23.

9 Irrera, A., 2015. FN Fintech Focus: Mapping Europe’s alternative finance sector | TheTally—comment and analysis from Financial News | efinancialnews.com. [online] Thetally.efinancialnews.com. Available from: http://thetally.efinancialnews.com/2015/02/fn-fintech-focus-mapping-europes-alternative-finance-sector/?mod=investmentbanking-tally [Accessed 25 Mar. 2015].

10 VocaLink, 2013. Mobile usage: Attitudes and payments research report 2013. Rickmansworth: VocaLink, (14017327220513)

11 For example, http://www.bbc.com/news/business-22545804—Contactless ‘charging errors’ at Marks and Spencer, or http://www.mirror.co.uk/money/real-dangers-card-clash--5189987—“The real dangers of card clash.”


13 Read about the “Internet of Me” and security implications in Accenture report “Security Implications of the Accenture Technology Vision 2015.”

14 “Winning the Race for Relevance with Banking Customers,” http://www.accenture.com/gb-en/Pages/insight-winning-race-relevance-banking-customers.aspx.

15 http://www.coloribus.com/adsarchive/promo-casestudy/mobile-payment-launch-of-swish-18495705/ “Launch of Swish.”

16 The optimal range was 60-180 with a minimum of 20 participants in each of three experimental groups, to ensure reliability and to avoid generalizable results, and a maximum of 60 to avoid compromising statistical validity through data mining in the conceptual model used (Harris, 2008).

17 The research team defined digital payments to be “payments made through digital channels, using existing card or interbank networks, or alternative payment networks. These can be between peers, buying goods and services by mobile or in applications, online as well as in-store. This includes contactless payments, either a contactless plastic card payment or a mobile NFC payment. However, it excludes traditional card methods (Chip and PIN plastic card used in store, or manual card data entry online) and online banking.”

18 The UTAUT2 model was defined by Venkatesh V. et al (2012).

19 Paym is the person-to-person digital payments method introduced by UK banks in April 2014.

20 A longitudinal survey is a study of the correlation between variables from repeated observations of the same variables over time.

Notes


http://www.theukcardsassociation.org.uk/news/UKCardPayments2014.asp


http://www.paymentscouncil.org.uk/media_centre/press_releases/-/page/3237/

http://www.paymentscouncil.org.uk/media_centre/press_releases/-/page/3237/

http://www.statista.com/statistics/271851/smartphone-owners-in-the-unitedkingdom-uk-by-age/





http://thetally.efinancialnews.com/2015/02/fn-fintech-focus-mapping-europes-alternative-finance-sector/?mod=investmentbanking-tally





http://www.bbc.com/news/business-22545804

http://www.bbc.com/news/business-22545804

http://www.mirror.co.uk/money/real-dangers-card-clash--5189987

http://www.mirror.co.uk/money/real-dangers-card-clash--5189987



http://www.accenture.com/gb-en/Pages/insight-winning-race-relevance-banking-customers.aspx



http://www.coloribus.com/adsarchive/promo-casestudy/mobile-payment-launch-of-swish-18495705/



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