Commentary

Behind the Numbers of Mobile Payments at SXSW

Some of the numbers around mobile payments at SXSX initially struck me as a bit low.

LevelUp barcode readers for mobile payments were set up at concessions stands throughout the SXSX convention center.

As of today, there have been 4,000 transactions by more than 2,000 individuals using their phones to pay, according to LevelUp CEO Seth Priebatsch.

With somewhere around 25,000 attendees at SXSW Interactive over the weekend, the mobile payment numbers would seem to indicate that only a small percentage of attendees tried mobile payments, even with the high visibility.  

This is somewhat consistent with what one of the LevelUp tutors at SXSW told us on Monday as she solicited people in line to try the system. She estimated that about one to two of every 10 people signed up. Viewed another way, between 10 and 20 percent of the people at her location gave it a shot.

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While the percentage may seem low, it’s probably realistic given the time it’s going to take moving to mass adoption of mobile payments, a highly fragmented market, to say the least.

There’s the challenge of getting people to try something new, the issue of security (tough to assure someone of while waiting in a quick concession line for food) and the lack of spare time while at SXSW. Add to that, people had to be in line at a concession stand to be a logical sign-up target.

However, while the sign-up numbers may seem low, the usage patterns may be more significant and they are impressive:

  • 64% of users paid more than once with it
  • $35,000 was spent (and these are small concession stand payments)
  • The average sale was $7.90

Mobile payments are a relatively small subset of mobile commerce, coming into play only at the moment of physical purchase, so the numbers should be lower than overall mobile commerce.

And  we do have to give LevelUp credit for soliciting new users in the backyard of Isis, the contactless payment joint venture among wireless carriers conducting one of its main pilots in Austin, the home of SXSW.

We asked Priebatsch about the LevelUp view of the final numbers. “They blew away our expectations.”

That may be the best measure to the bottom line: it’s not about the number of sign-ups, it’s about the amount of changed behavior.

 

4 comments about "Behind the Numbers of Mobile Payments at SXSW".
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  1. Serena Ehrlich from Business Wire, March 15, 2013 at 4:59 p.m.

    Like you, my first thought (and tweet) was that this number was very low, but as you point out, this was about changing behaviors. I also think it was low because this particular subset of audience is used to expecting bigger offerings in exchange for trying a new app. I am so excited to see where this goes!

  2. Chuck Martin from Chuck Martin, March 15, 2013 at 5:04 p.m.

    Thanks Serena, we have the same anticipation of watching this evolve. Will be interesting to see if those who used it stick with it post SXSW.

  3. Greg Flakus from gf strategies, inc, March 18, 2013 at 3:41 p.m.

    very interesting to see how Levelup takes this learning and goes for more users. The key is getting advance signups. This was done by having on the ground personnel assist and educate. it is the future and will be watching

  4. Chuck Martin from Chuck Martin, March 18, 2013 at 3:54 p.m.

    Right Greg, the ground personnel of on-scene tutors knew there stuff, so consumers were not left hanging to figure it out on their own.

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