Panel Paper: Making Connections: Adoption of Mobile Phones and P2P Payments and Financial Inclusion

Thursday, November 7, 2019
Plaza Building: Concourse Level, Plaza Court 4 (Sheraton Denver Downtown)

*Names in bold indicate Presenter

Ellen A. Merry, Federal Reserve Board

Mobile phones and smartphones are increasingly important for making financial as well as social connections. Using data from the Federal Reserve Board’s 2018 Survey of Household Economics and Decisionmaking (SHED) I explore factors correlated with the use of mobile phones and adoption of mobile person-to-person (P2P) payments among U.S. adults. Focusing on a subset of adults who have experienced more financial strain, I explore implications of these results for mobile technology to serve more financially vulnerable groups.

Adoption of mobile phones is widespread in the U.S., while the use of mobile P2P payments is less common, but growing. Social factors can be an important driver of technology adoption in general. Relationships with friends and family may be particularly important in the early adoption of mobile P2P services, as these services have become popular as a way to split bills among friends and connect with social networks. Adopting technology also involves costs, including paying for a mobile phone and data plan and understanding and managing privacy or security risks associated with use. Data from the SHED allow for exploration of how social connections, preferences, and demographic characteristics correlate with adoption of mobile phones and mobile P2P services among U.S. adults.

The benefits and costs of technology use may be perceived or experienced differently by people with fewer financial resources, less comfort with technology, or less supportive personal networks. Some P2P services provide almost immediate transfers of funds, which may be of particular benefit for financially vulnerable adults to receive money in an emergency. Focusing on a subset of adults who report more financial fragility, I explore whether these adults are any more or less likely to use mobile phones and mobile P2P payments. Understanding more about subpopulations who adopt these technologies can inform policy discussions around faster payments and financial inclusion more broadly.