Money matters to consumers and the new Future of Money market research by Logica shows changes ahead in how we pay for things in the future. And those changes are coming fast.
Digital payments are growing, but cards still are the leading payment method used by Americans. The study shows that while payment habits and preferences are slow to change there is growing consumer interest in new ways to pay for goods and services.
Cards still dominate in the US
“In-person payments with debit cards (31%), credit cards (29%) and cash (25%) are most prevalent, with a long way to go for apps. 20% of online payments are now made with the PayPal app, with other apps like Amazon Pay at 3% and Visa Checkout at 2%,” the Logica report says.
Federal Reserve Bank of San Francisco’s research shows that cash is losing its luster, down from 30% to 26% in 2019. Cash is still used mostly for payments under $10 and is used most by under age 25 individuals.
Mostly what seems to be driving the upturn in digital and alternate payments is consumers are simply buying more online and cards and digital payments are necessary to make purchases online.
Payments evolving quickly
US consumers are getting more comfortable using digital payment apps with PayPal leading by a large margin with 68% of Americans using PayPal.
“Other digital payment apps have a long way to go to catch up with PayPal. 20% of Americans report using or having Google Pay or Venmo on their phone, whereas 19% use or have a bank’s digital wallet system or Apple Pay, while 23% use a specific store’s digital app to pay,” Logica reports.
Young people are quickly embracing digital payments with 18% of Millennials likely to make daily mobile phone payments. Not surprising, since they own an average of six connected devices each.
Overall, 68% of Americans are making mobile phone payments at varying levels of frequency: daily (10%), weekly (24%) and monthly (23%).
Logica also noted that 5% of consumers made their most recent in-store payment using PayPal and 20% use PayPal in their most recent online purchase.
New technologies on the horizon
New payment technologies are on the horizon and expected to gain adoption, particularly with younger consumers. Who hasn’t heard the buzz about facial recognition, AI, in-car, voice, and wearables payments?
Researchers say Americans expect the way they pay will change over the next five years. In fact, 27% of Americans expect to pay in-person with apps five years from now, where only 6% currently use app payments in-person.
You can gain more insights into the Future of Money at the Logica Research website.
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