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53 percent of U.S. consumers between 18 to 24 make mobile payments

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February 29, 2016

New research from GfK reveals that about 53 percent of Generation Z (aged 18 to 24) U.S. consumers said they’ve made a mobile payment while using the Internet in the past six months.

According to the study, the number for Generation Z was nearly four times the 14 percent figure for Baby Boomers (aged 50 to 68) and substantially higher than the 37 percent for Generation Y (aged 25 to 34), and 27 percent for Generation X (aged 35 to 49).

While mobile payments on smartphone, tablets and other mobile devices account for just 3.1 percent of all transactions in the U.S., the payment method accounts for 7.2 percent of transactions among Generation Z, the study discovered.

But Generation Z consumers don’t just use mobile payments more, they also have more faith in the system and are the group most excited about paying for “more and more transactions” from their mobile devices, says Gfk.

According to the firm’s results, no less than thirty-one percent of Generation Z consumers agreed that “making payments with a mobile device is more secure than other methods” and 53 percent said they were looking forward to using mobile for more transactions.

By comparison, only 16 percent of the overall population felt mobile payments are secure, though at 28 percent, Generation Y was most closely in line with Generation Z.

On average, only six percent of Baby Boomers feel mobile payments are secure. Generation Z’s enthusiasm for a future with increased mobile payment opportunities also outstripped the U.S. average of 27 percent.

Generation Y was right behind their younger cohorts with 45 percent looking forward to more mobile payments.

GfK said Generation Z’s inclination for mobile payments and uncertainty in the general population provide an opening for companies to better explain in detail the system’s real value proposition to consumers.

“Many consumers today do not understand the advantages offered by mobile payments,” said Tim Spenny, Vice President on GfK’s Financial Services team.

“This creates an opportunity for the wireless industry to develop its own narrative around why people should use mobile devices to pay for their purchases, with the better security, speed and ease of use top among the reasons. In 2016, we see mobile payments gaining traction through the addition of benefits such as rewards, discounts, and coupons that are integrated into phone payment systems,” he added.

But in crafting that message, the mobile services industry will have to address the one universal concern among consumers: privacy.

According to the report, more than half of consumers in all generational groups expressed some concern for their personal information when making mobile payments.

In other mobile and wireless news

While AT&T and Sprint were both very busy with earnings calls yesterday, without making a sound, T-Mobile upgraded its 'Simply Prepaid' data plans to include more bandwidth capacity.

The upgraded plans now include 2 more gigabytes of data on the bottom two plans and an extra five GB of data for users on the higher-end plan.

Under the new arrangement, prepaid users can now get 3 GB of high speed data for $40 per month, 5 GB of high speed data for $50 a month or 10 GB of high speed data for $60 a month.

All three plans still come with unlimited talk and text just as before. Simply Prepaid offerings formerly only included 1 GB of data for $40 per month, 3 GB of data for $50 per month or 5 GB of data for $60 / month.

The data increase on T-Mobile's packages comes just after the one year anniversary of the introduction of the Simply Prepaid plans and alongside a new family of prepaid similar offers from Sprint's subsidiary Boost Mobile.

Boost is now offering multi-line prepaid options for U.S. families, including a plan for two lines with unlimited talk, text and data plus 5 GB of high-speed data per line for $70 per month, three lines for $90 per month or four lines for $100 a month with unlimited talk, text and data plus 1.5 GB of high-speed data per line.

In other mobile and wireless news

Earlier this morning, Phoenix Tower International (PTI) announced that it has closed a deal to acquire more than 600 wireless tower sites from U.S. wireless carrier T-Mobile.

According to Phoenix Tower, the transaction includes the exclusive right to manage and operate the sites via PTI’s local U.S. subsidiaries.

Though the exact terms of the deal weren't disclosed, Phoenix Tower simultaneously announced the closing of a five-year credit facility with Toronto Dominion (TD) Securities used to finance the acquisition and provide funds for new tower development and the acquisition of further mobile infrastructure assets in the United States.

"The closing of this credit facility with Toronto Dominion was crucial to the acquisition of the sites with T-Mobile,” said Phoenix Tower CEO Dagan Kasavana.

“TD's facility provides additional financing for development and acquisition opportunities in the United States where we want to continue to build momentum after our deal with T-Mobile. TD is a market leader in tower financing and we are excited to work with them in our continued expansion in the United States,” added Kasavana.

The news comes amid reports that T-Mobile is looking to raise $10 billion, as it prepares for a showdown with Verizon and AT&T in the upcoming incentive auction.

Two weeks ago, the wireless carrier announced a $2 billion debt sale as a way to secure funds the company admitted could be used for the acquisition of additional mobile spectrum.

The sale of T-Mobile’s wireless towers echoes previous sales from AT&T and Verizon ahead of the AWS-3 spectrum auction that will take place soon.

In December 2013, AT&T pulled together $4.83 billion for the auction in a deal to lease the rights to approximately 9,000 of its towers to Crown Castle.

AT&T also sold 600 of its towers to Crown Castle outright as part of the deal. In September 2014, Verizon Wireless announced that it too was considering the sale of its towers.

In March of this year, the mobile carrier closed a $5 billion deal to lease or sell 11,448 cell sites to American Tower.

The AWS-3 auction saw AT&T and Verizon spend a combined $28 billion, more than half of the $41 billion in total revenue.

Though Verizon admitted recently that the 600 MHz spectrum up for grabs is not its top priority, T-Mobile has repeatedly expressed the sentiment that it will take the opportunity to scoop up as much wireless spectrum as it can.

“T-Mobile is definitely ready and sees this spectrum auction as a unique and important opportunity,” said T-Mobile CEO John Legere. “T-Mobile is going to go hard in this low-band spectrum auction and put that spectrum to good use for our customers.”

Legere’s comments were supported by CFO Braxton Carter, who said in October the carrier will “buy anything that's humanly possible within our power.”

In other mobile and wireless news

Don't look now but there's a mini war going on right now between ISPs and the Federal Communications Commission.

To be sure, the FCC's Annual Broadband Report will be published shortly and last week, FCC chairman Tom Wheeler put out a factsheet about its main finding-- that broadband is not being deployed in a reasonable and timely fashion to all Americans.

The report will be discussed at the FCC's next meeting on January 28 and Wheeler noted in his summary that the regulator is required to "take immediate action" if it makes that finding.

Unsurprisingly, the ISPs are not happy at all and US Telecom has rushed out a response. "It would seem that the FCC's report should carry the headline 'our policies have failed,'" the industry body complains, "since it concludes that six years after adoption of the national broadband plan, the commission's actions haven't produced even so much as a 'reasonable' level of broadband deployment."

It takes issue with the main finding. "No one actually believes that deployment in the United States is unreasonable. Unfortunately, this annual process has become a cynical exercise, one that eschews dispassionate analysis, and is patently intended to reach a predetermined conclusion that will justify a continuing expansion of the FCC's own regulatory reach."

The rollout of broadband in the U.S. has been a source of tension for more than ten years already. The truth is that compared with many other nations, the provision of internet access is far behind, both in terms of speed and reach. It is also significantly more expensive than in comparable nations.

Source: GfK Market Research.

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