New study from Podium highlights the impacts local businesses may face if they don’t support their customers with frictionless payment methods
Podium, the leading communication and payments platform for local businesses, today released the 2021 State of Payments Report, highlighting the types of payment methods customers use, their preferences and the impacts local businesses may face if they don’t support their customers with frictionless payment methods.
According to the report, U.S. consumers are comfortable spending 43% more money swiping their credit card than paying with cash, and 53% more compared to reading their credit card numbers over the phone to a representative. A third (33%) of all (U.S. and Australia) respondents listed swiping or inserting their credit cards as their preferred method of payment, and nearly a quarter (23%) of consumers abandon transactions entirely when their preferred methods of payment aren’t available. Enabling more ways to pay, especially preferred ways, will help local businesses drive repeat customers.
“With the current digital transformation and pandemic-induced pressures, payments have evolved from ‘how you get paid’ to playing a critical role in your business’ customer experience,” said Eric Rea, co-founder and CEO at Podium. “Local businesses need to be acutely aware of preferences across the entire customer experience, and with so many ways to pay these days, it’s crucial for them to provide the options their customers want.”
Other key findings from the 2021 State of Payments Report include:
Consumers want convenient payment options
- Being offered convenient payment options (41%) is the second most important factor customers consider when choosing a local business, next to customer service (60%). Preferred payment options were more important to customers than proximity to their home (36%), availability of sales or discounts (25%) or a personal relationship with the business (20%), among other elements.
- If a local business only accepts cash and credit card swipes, they are missing the top payment choices of 31% of U.S. consumers.
- Digital options—including website payments, mobile wallets such as Apple Pay and Google Pay, direct pay platforms like Venmo or Paypal, and text links—were the top payment choice for 20% of consumers.
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Those with higher incomes often have higher expectations
- 38% of high-income consumers (those with a household income greater than $100,000 per year) have delayed payment or abandoned a transaction because their preferred payment method was not offered, 74% higher than the typical consumer.
- 58% of high-income consumers were more likely to avoid local businesses that failed to offer contactless payment methods.
- Nearly two-thirds (64%) of high-income consumers who have tried text payments either liked or strongly liked it.
The pandemic adjusted consumers’ payment preferences, and those changes are here to stay
- Neary three-in-four (72%) consumers reported the changes to their preferred payment methods due to COVID-19 are likely to last beyond the pandemic.
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