mastercard impact of innovation study cross-country … · ukraine, united arab emirates, south...

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MASTERCARD IMPACT OF INNOVATION STUDY

September 2016

Cross-country report

22

3 BACKGROUND & OBJECTIVES

4 METHODOLOGY

6 EXECUTIVE SUMMARY

8 ATTITUDES TOWARDS DIGITALIZATION

15 PAYMENT AND AUTHENTICATION METHODS

26 SEGMENTS BASED ON LEVEL OF DIGITALIZATION

32 IPSOS PROJECT TEAM

CONTENT

3

Background & Objectives

Mastercard commissioned LocalTime PR and Ipsos Hungary to conduct a regional

study on digitalization of different areas of consumers’ life.

The aim of the study is to measure the level of digitalization and to better

understand consumer habits and attitudes in 23 countries.

Measuring segments based on the openness towards digitalization and cross-

country comparisons are also included in the study objectives.

4

Methodology

Target group: online urban population aged 20-50 years, bank users, owning a bank account.

Participating countries are: Hungary, Slovakia, Czech Republic, Poland, Serbia, Bulgaria, Austria, Croatia, Israel, Romania, UK, Italy, Germany, France, Sweden, Turkey, Russia, Ukraine, United Arab Emirates, South Africa, Egypt, Kingdom of Saudi Arabia and Kenya

Sample structure: N=1000 respondents per country, representative sample of 20-50 aged online urban population by gender, age and region

Methodology: online self-completed interviews via Ipsos access panel

Questionnaire: 20 minutes long self-completed online questionnaire

5

Sample structure of the online population of consumers by regions

Distribution of the samples along demographic groups (in %)Western Europe

Central Eastern Europe

High-growth, emerging

Middle East and Africa

Gendermale 51 52 54 61

female 49 48 46 39

Age20-29 22 27 23 42

30-39 32 34 35 40

40-50 47 39 42 18

Education

primary 2 1 1 1

vocational 16 13 12 2

secondary 27 27 11 10

college / university 54 58 76 86

I do not want to answer 1 1 1 1

Working status

I have my own company 8 7 10 10

I work as an employee 72 72 66 66

I am currently unemployed 5 5 6 8

I am a student 6 6 3 7

I am on maternity leave 1 3 3 1

I am a pensioner 1 1 3 1

I do not work / full-time mother / etc. 6 3 5 5

I do not want to answer 2 2 4 2

Social status

A 25 29 36 38

B 10 8 12 11

C1 15 14 17 19

C2 20 16 7 5

D 6 6 5 1

E1 2 1 0 0

E2 19 19 19 21

NA 4 6 4 6

Significantly higher vs. total sample

Significantly lower vs. total sample

66

Mastercard Impact of Innovation Study-Executive Summary

Attitudes toward digitalization

Payment & authentication methods

Segments based on level of digitalization

On the whole, consumers have a positive attitude towards digitalization and innovation. A vast majority think that digital services will further spread to new areas and will be used by more people.

Public Education, healthcare and public transport are the most commonly mentioned areas where more innovation of digital services would be necessary.

On the regional level typically High-growth, emerging countries and MEA are more optimistic about the impact of digitalization and innovation. However, regarding the further spread of digital services HGEM and CEE are the most positive: 4 out of 5 consumers think that they will be available for more people.

Executive summary

Mobile payment has a great potential to become a widely accepted method for making purchases. More innovative solutions like jewellery, household appliances or implants will probably need more time to become really popular.

Regarding the authentication method safety of the bank account is of key importance, but personal data protection is also an important need. Biometric authentication is quite new to consumers, but generally they do not have serious security concerns with it.

Again, High-growth, emerging countries and MEA are the regions where consumers are more open towards innovative solutions: here more than 50% would prefer mobile payments.

Generally segmenting factors vary on a wide scale across countries, even within the same region. On the whole, the measured devices showed the most developed and balanced penetration, whereas online banking and mobile payment is the factor which differs the most between countries.

Regarding total segment distribution, drifting followers have the highest share. Level of digitalization correlates strongly with social status in all countries.

Currently High-growth and emerging markets have the highest share of eager promoters among 20-50 year old consumers. Share of resistants is typically below one quarter in all countries, and the share of eager promoters never exceeds one third of the banking population.

8

Attitudes towards digitalization

9

The majority of consumers are rather satisfied with digitalization regardless of the country, while they were a bit more cautious when rating the impact of innovation on society

1 1 2 1 3 1 2 1 0 0 0 1 1 2 0 3 0 0 1 0 0 1 15 4 5 6 5 4 4 6 3 4 3 7 5 6 2 6 1 1 2 2 1 4 3

33 28 30 3821 21

34 3422 22 22

26 25 2115

2317 15

25 17 1520 24

48 52 5046

44 4442 45

50 5139

48 45 4444

4346 45

44 54 51 38 38

12 15 13 927 30

18 14 25 23 35 17 23 27 3826 34 38 27 27 32 36 34

3.7 3.8 3.7 3.63.9 4.0

3.7 3.64.0 3.9 4.1

3.7 3.8 3.94.2

3.84.1 4.2

3.9 4.0 4.1 4.1 4.0

1

2

3

4

5

0%

20%

40%

60%

80%

100%

UK IT DE FR SW HU SK CZ PL RS BG AT HR IL RO TR RU UA AE ZA KE EG SA

Q2A. Satisfaction with 'digitalization’

1 – Not at all satisfied, I’m afraid we are heading in the wrong direction 2 3 4 5 – Completely satisfied, I think this is the way it should be Average (1-5)

Base: all respondents


Western Europe Central Eastern EuropeHigh-growth,

emergingMiddle East and Africa




1 2 1 3 1 4 2 2 1 1 2 2 3 3 1 3 1 1 1 0 0 2 16 6 8 154

14 9 13 9 9 8 13 11 103

11 5 4 4 3 1 4 5

31 35 4244

21

34 37 3932 26 27

4132 32

20

3322 21 32

1811

24 26

45 4338

33

40

32 3437

40 41 34

3236 38

44

35

40 3738

4537

36 38

17 13 10 5

3516 17 10 19 22 29

12 18 1733

1732 37

26 3351

34 30

3.7 3.6 3.53.2

4.0

3.4 3.5 3.43.7 3.7 3.8

3.4 3.5 3.64.1

3.53.9 4.1 3.8

4.14.4

4.0 3.9

1

2

3

4

5

0%

20%

40%

60%

80%

100%


Q2B. Innovation has a positive effect on society

1 – Does not have a positive impact at all 2 3 4 5 – Definitely has a positive impact Average (1-5)

10

Both digitalization and innovation are rated more positively in the MEA region and in High-growth and emerging markets compared to Western Europe and CEE

1 1 1 15 4 3 3

3223 19 19

4946 45 45

1326 32 33

3.73.9 4.0 4.1

1

2

3

4

5

0%

20%

40%

60%

80%

100%

Western Europe Central Eastern Europe High-growth, emerging Middle East and Africa

Q2A. Satisfaction with 'digitalization’

1 – Not at all satisfied, I’m afraid we are heading in the wrong direction 2 3 4 5 – Completely satisfied, I think this is the way it should be Average (1-5)



Western Europe Central Eastern Europe High-growth, emerging Middle East and Africa2 2 2 19 9 7 3

37 31 2521

4038

3839

12 20 28 36

3.5 3.7 3.84.1

1

2

3

4

5

0%

20%

40%

60%

80%

100%

UK IT DE FR

Q2B. Innovation has a positive effect on society

1 – Does not have a positive impact at all 2 3 4 5 – Definitely has a positive impact Average (1-5)



11

76% 84%

78%

81%

86%

87%

84%

86%

83%

89%

83%85%

87%

82%

89%

62%

81%

86%

80%79%

12%11%10%

12%

8%

8%

8%6%

10%6%

6%7%9%5%10%

12%

6%5%

27%14%

10%

15%16%

UKIT

DE

FR

SW

HU

SK

CZ

PL

RS

BGATHR

IL

RO

TR

RU

UA

AE

ZA

KE

EG

SA

Digital services will be used on more and more areas of life,and by more and more people

Digital services will be used on more and more areas of life,but it will remain the privilege of a smaller group of people

The areas of using digital services will remain very close tothe current state

Fewer and fewer people will use digital services

The majority of consumers agree that digital services will be used on more areas and by more people. A minority think that they will remain a privilege of a smaller group.


Q6. What should we expect from the future regarding digital services?

12

80%

86%

88%

81%

11%

8%

8%

15%

Western Europe

Central EasternEurope

High-growth,emerging

Middle East andAfrica

Digital services will be used on more and more areas of life,and by more and more people

Digital services will be used on more and more areas of life,but it will remain the privilege of a smaller group of people

The areas of using digital services will remain very close tothe current state

Fewer and fewer people will use digital services

In Central Eastern Europe and High-growth and emerging countries consumers are more optimistic regarding the further spread of digital services among people


Q6. What should we expect from the future regarding digital services?



13 Base: all respondents

The most commonly mentioned area where more innovation in digital services would be needed is public education

Q5. Too few digital services on this area, more innovation needed




commerce

networking, meeting people

healthcare

public education

financial issues / services

public transport

automobile, driving a car

other type of transport

travelling

hosting & catering

work-related

0-20% 21-40% 41-60% >60%


European regions generally miss innovation in lower ratios. However, the main areas where more innovation would be welcome are the same in all regions: healthcare, education and public transport

Q5. Too few digital services on this area, more innovation needed


commerce

networking, meeting people

healthcare

public education

financial issues / services

public transport

automobile, driving a car

other type of transport

travelling

hosting & catering

work-related

0-20% 21-40% 41-60% >60%

15

Payment & authentication methods

16

54%

16%

13%

20%

8%

6%

6%

4%

28%

57%

22%

16%

24%

8%

6%

7%

4%

24%

69%

29%

16%

24%

4%

9%

9%

10%

14%

72%

34%

19%

27%

9%

8%

9%

12%

15%

49%

18%

12%

20%

7%

9%

6%

6%

31%

70%

32%

17%

28%

9%

7%

6%

6%

15%




58%

32%

15%

18%

11%

13%

10%

8%

22%

72%

48%

21%

29%

11%

14%

14%

15%

10%

45%

14%

10%

14%

8%

5%

5%

2%

41%

68%

34%

16%

25%

11%

5%

6%

4%

15%

65%

24%

14%

25%

8%

3%

6%

8%

20%

59%

33%

27%

31%

19%

21%

17%

20%

5%

Generally mobile payments have the highest potential across all countries. More innovative methods like jewelleryor household appliances were more popular in High-growth,emerging countries and MEA

Q11. Preferred device for payment


41%

16%

13%

10%

9%

5%

4%

4%

43%

47%

18%

10%

14%

6%

5%

6%

9%

31%

31%

15%

6%

21%

6%

3%

2%

3%

49%

27%

7%

6%

9%

3%

4%

2%

2%

61%

72%

28%

19%

35%

19%

5%

8%

6%

15%

57%

16%

21%

29%

9%

7%

7%

6%

24%

55%

18%

14%

24%

6%

4%

5%

6%

28%

73%

48%

20%

28%

12%

7%

9%

10%

12%

87%

33%

15%

37%

7%

6%

8%

11%

4%

70%

44%

15%

26%

13%

7%

7%

15%

8%

68%

35%

14%

26%

16%

9%

10%

15%

8%

mobile phone tablet smart watch ID card / passport

implant fitness band jewellery household appliances

none of these

17

37%

14%

9%

15%

7%

4%

4%

4%

46%


While Western Europe is more traditional and a high ratio would like to stick to their plastic card, mobile payments and other innovative solutions have more potential in High-growth, emerging countries, and especially in the Middle East and Africa

Q11. Preferred device for payment


mobile phone tablet smart watch ID card / passport

implant fitness band jewellery household appliances

none of these

57%

21%

14%

22%

7%

7%

7%

6%

25%

64%

35%

17%

22%

11%

12%

10%

10%

18%

73%

41%

16%

29%

12%

8%

8%

13%

8%Significantly higher vs. total sample


18

PIN code fingerprint scan code received via SMS during the transaction

'selfie' pay other




The preferred authentication method varies a lot across countries. PIN codes, fingerprint scan and codes received via SMS are the most widely accepted


Q12. Which authentication method would you prefer when paying with your bank card?

46%

40%

8%

5%

1%

23%

39%

30%

7%

1%

40%

35%

19%

3%

3%

8%

37%

48%

4%

2%

41%

41%

9%

4%

4%

31%

40%

25%

2%

1%

31%

36%

29%

4%

1%

32%

35%

29%

3%

1%

37%

34%

25%

4%

1%

30%

48%

17%

4%

1%

33%

30%

30%

5%

1%

43%

31%

23%

2%

1%

36%

50%

8%

5%

1%

31%

33%

29%

6%

1%

29%

30%

33%

7%

1%

15%

39%

38%

7%

1%

29%

25%

43%

2%

1%

21%

38%

33%

7%

0%

27%

19%

37%

17%

0%

23%

51%

21%

5%

0%

25%

43%

22%

9%

0%

26%

22%

44%

8%

0%

20%

18%

56%

6%

1%

19

34%

35%

26%

4%

1%

23%

31%

40%

5%

1%


PIN codes are more preferred in Western and Central Eastern Europe, while codes via SMS are more popular in the other two regions


PIN code fingerprint scan code received via SMS during the transaction

'selfie' pay other

Q12. Which authentication method would you prefer when paying with your bank card?

31%

38%

25%

5%

2%

24%

32%

36%

7%

0%



20

Biometric authentication methods are typically used by a minority only. On the whole few concerns arose regarding their safety, but there are some countries where consumers still have to be convinced





1 2 1 3 1 4 2 2 1 1 2 2 3 3 1 3 1 1 2 2 2 1 26 6 815

414

9 13 9 9 8 13 11 103

115 4 5 6 5 7 6

3135

4244

21

3437

3932 26 27

4132 32

20

33

22 2128 17 15

26 28

45 4338

33

40

32 3437

4041 34

3236 38

44

35

4037

41

3736

32 31

17 13 10 5

3516 17 10

19 22 2912 18 17

3317

32 3724

38 4333 34

3.73.6 3.5

3.2

4.0

3.4 3.5 3.43.7 3.7 3.8

3.43.5 3.6

4.1

3.5

3.9 4.13.8

4.0 4.13.9 3.9

1

2

3

4

5

0%

20%

40%

60%

80%

100%

1 – Not at all secure way of payment 2 3 4 5 – Completely secure way of payment Average (1-5)

Q13. To what extent do you feel it is a secure way of making purchases authenticated with your fingerprint, facial features, or with another biometrical method?

Q14. Penetration of biometric authentication methods

6% 5% 4% 2% 10% 5% 4% 3% 7% 15% 8% 8% 8% 9% 6% 19% 4% 12% 50% 11% 19% 26% 34%

21

5% 7% 10% 23%

Consumers in European regions, especially in Western Europe were more cautious when rating the security of biometric authentication methods


4 5 4 211 9 7 6

3325

23 22

39

37 3734

1325 30 36

3.43.7 3.8 4.0

1

2

3

4

5

0%

20%

40%

60%

80%

100%

1 – Not at all secure way of payment 2 3 4 5 – Completely secure way of payment Average (1-5)


Q13. To what extent do you feel it is a secure way of making purchases authenticated with your fingerprint, facial features, or with another biometrical method?

Q14. Penetration of biometric authentication methods




Ratings of biometric authentication along different aspects were moderate in most of the cases. However, it is definitely considered to be an innovative solution




These are safer than the traditional authentication methods

It is trendy, cool to pay with these methods

They ensure a fast payment process

These authentication methods are easy to use

They are new, innovative solutions for payment authentication

3.4 3.6 3.2 3.2 3.33.7 3.6 3.5 3.6 3.7 3.5 3.1 3.5 3.3 3.6 3.6 3.7 3.8 3.7 3.8 4.2 3.7 3.7

3.2 3.1 2.9 2.9 3.0 3.4 3.5 3.5 3.2 3.32.9 3.0

3.4 3.1 3.4 3.4 3.3 3.33.7 3.6 3.8 3.8 3.8

3.4 3.6 3.6 3.4 3.6 3.9 3.6 3.5 3.7 3.8 3.5 3.6 3.9 3.4 3.8 3.7 3.6 3.6 3.7 3.8 3.9 3.7 3.7

3.5 3.5 3.4 3.3 3.4 3.8 3.6 3.5 3.7 3.9 3.6 3.5 3.8 3.6 3.7 3.6 3.7 3.7 3.7 3.9 4.0 3.7 3.8

3.7 3.8 3.5 3.4 3.7 4.0 3.9 3.9 3.8 3.8 3.7 3.5 3.8 3.8 3.8 3.8 4.0 3.9 3.7 4.0 4.1 3.8 3.8

Q15. Below you can see some statements told by others about using biometric authentication when shopping. Please rate each of them on a 5 point scale according to what extent do you agree with them!


In the Middle East and Africa biometric authentication is considered to be much cooler compared to other regions, but on the whole consumers are not yet very familiar with these methods


These are safer than the traditional authentication methods

It is trendy, cool to pay with these methods

They ensure a fast payment process

These authentication methods are easy to use

They are new, innovative solutions for payment authentication

3.3 3.5 3.7 3.8

3.0 3.3 3.33.8

3.5 3.7 3.7 3.8

3.4 3.7 3.7 3.8

3.6 3.8 3.9 3.9

Q15. Below you can see some statements told by others about using biometric authentication when shopping. Please rate each of them on a 5 point scale according to what extent do you agree with them!

24

Security of the bank account is the No. 1 factor everywhere when choosing the authentication method, and personal data protection comes second





the security of my bank account

the security of my personal data

speed of the process

simplicity

1.5 1.8 1.5 1.5 1.7 1.6 1.5 1.5 1.7 1.8 1.7 1.5 1.7 1.8 1.7 1.8 1.5 1.8 2.0 1.6 1.6 1.8 1.8

2.0 2.1 2.1 2.0 2.1 2.0 2.0 2.1 2.2 2.0 1.9 2.1 2.0 1.9 2.1 2.0 2.1 2.1 2.3 2.0 1.9 2.2 2.3

3.2 3.1 3.3 3.3 3.3 3.1 3.2 3.1 2.9 3.1 3.1 3.3 3.1 3.1 2.9 3.0 3.1 2.9 2.8 3.1 3.0 2.9 2.8

3.2 3.1 3.1 3.2 2.9 3.3 3.2 3.2 3.2 3.2 3.2 3.1 3.2 3.2 3.3 3.2 3.3 3.3 2.9 3.3 3.4 3.1 3.0

Q16. Factors when choosing the authentication method

25

Differences are minimal on the regional level



the security of my bank account

the security of my personal data

speed of the process

simplicity

1.6 1.7 1.7 1.7

2.1 2.1 2.1 2.1

3.2 3.0 3.0 3.0

3.1 3.2 3.2 3.2

Q16. Factors when choosing the authentication method

26

Segments based on level of digitalization

27

Definition of segments

service service service

device

banking

banking

banking

device

banking

banking

banking

device

banking

banking

banking

resistant

drifting follower

enthusiastic follower

eager promoter

For defining segments based on levels of digitalization we have used the following aspects:

banking

low no online banking (via browser or app) and no mobile payment

mid user of online banking (via browser or app) but no mobile payment

high user of mobile payment

device

low

0-3 pcs. of the following devices: smartphone, tablet, smart TV, smart watch, sports-related smart device, health-related smart device, streaming box / set-top box, wireless speaker / headphones, drone, e-book reader, MP3 player / portable media player, game console

mid

4-6 pcs. of the following devices: smartphone, tablet, smart TV, smart watch, sports-related smart device, health-related smart device, streaming box / set-top box, wireless speaker / headphones, drone, e-book reader, MP3 player / portable media player, game console

high

7+ pcs. of the following devices: smartphone, tablet, smart TV, smart watch, sports-related smart device, health-related smart device, streaming box / set-top box, wireless speaker / headphones, drone, e-book reader, MP3 player / portable media player, game console

service

low0-3 services used with monthly frequency (selected in Q1 and codes 1-6 in Q2)

mid4-10 services used with monthly frequency (selected in Q1 and codes 1-6 in Q2)

highmore than 10 services used with monthly frequency (selected in Q1 and codes 1-6 in Q2)

From the combination of the 3 aspects we defined 4 general segments:

28

Levels of digitalization in different areas can be quite different even within the same region…


Distribution of segment componentsBanking Devices Services

Western Europe

UKITDEFRSW

CentralEasternEurope

HUSKCZPLRSBGATHRIL

RO

High-growth,

emerging

TRRUUA


AEZAKEEGSA

22%

40%

26%

37%

3%

26%

20%

12%

14%

38%

29%

12%

31%

21%

51%

8%

21%

11%

52%

13%

30%

72%

37%

65%

50%

68%

58%

57%

58%

69%

75%

60%

44%

53%

79%

47%

64%

45%

61%

32%

34%

28%

56%

13%

18%

39%

13%

10%

6%

5%

40%

17%

11%

13%

26%

19%

18%

9%

22%

15%

4%

31%

47%

54%

20%

31%

57%

11%

24%

20%

23%

35%

48%

21%

29%

26%

25%

26%

32%

21%

26%

31%

22%

19%

29%

25%

24%

23%

20%

26%

26%

25%

40%

44%

37%

35%

40%

43%

48%

45%

40%

44%

41%

38%

44%

38%

40%

36%

37%

42%

28%

39%

34%

31%

30%

40%

33%

28%

17%

39%

29%

26%

30%

34%

24%

38%

36%

25%

40%

41%

35%

38%

35%

49%

40%

40%

43%

45%

18%

14%

15%

26%

4%

10%

11%

15%

17%

4%

8%

9%

7%

5%

7%

8%

5%

2%

24%

4%

4%

16%

22%

67%

61%

68%

64%

51%

72%

77%

72%

68%

77%

60%

72%

69%

57%

68%

49%

56%

49%

64%

63%

62%

62%

61%

16%

25%

17%

9%

45%

18%

12%

13%

15%

19%

33%

19%

24%

38%

25%

43%

39%

49%

12%

33%

34%

22%

17%

low mid high

29

… but typically MEA is the least developed in terms of online banking and mobile payment, while penetration of devices is the highest there among consumers. Regarding digital services High-growth emerging markets are leading.


Distribution of segment componentsBanking Devices Services

Western Europe

Central Eastern Europe

High-growth, emerging


30%

24%

16%

44%

61%

59%

41%

29%

9%

17%

43%

27%

low mid high

32%

25%

26%

25%

39%

41%

38%

33%

30%

34%

37%

42%

18%

11%

5%

12%

65%

69%

53%

62%

17%

20%

42%

26%

30

Same goes for total segment shares: they vary a lot within regions as well. However, share of resistants is typically below one quarter, and the share of eager promoters never exceeds one third of the banking population.





11 15 1727

312 11 11 10

1710 9

157

136 9

416

611

21 16

4243

48

51

36

50 56 5245

45

4049

45

4241

42 3434

3038 30

3232

3329

24

16

33

2524

2528

28

28

27 26

27

33

2828 34

40

3029

3634

14 1310 5

28

13 9 12 1710

2115 13

2413

25 28 28

1426 31

1018

1

2

3

4

5

0%

20%

40%

60%

80%

100%

resistant drifting follower enthusiastic follower eager promoter

Segment shares

31

Currently high-growth, emerging markets have the highest share of eager promoters among 20-50 yo. consumers


1711 7

15

4646

3633

2628

2933

1115

2719

0%

20%

40%

60%

80%

100%

resistant drifting follower enthusiastic follower eager promoter


Segment shares

mastercard impact of innovation study cross-country … · ukraine, united arab emirates, south...

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