BNPL, digital wallets, and eCommerce rise as consumers fill their carts
A seamless payments experience is essential for most consumers. It drives payment choice at checkout just as much or even more than getting a good deal, according to a new survey conducted by TSG (The Strawhecker Group) and the Electronic Transactions Association (ETA).
“New payment methods are changing consumer behavior and the adoption of payment technology,” stated Jodie Kelley, CEO of ETA. “The survey found that when it comes to adopting new payments technology, ease of use is most important.”
“Despite inflationary concerns, savvy consumers are still filling their carts and gaining confidence in newer payment technologies like digital wallets and buy now, pay later,” said Mike Strawhecker, President of TSG. “The payments industry continues to provide merchants with solutions for new consumer experiences.”
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Ease of payments technology drives consumer behavior.
Since last year’s survey, frequent users of digital wallets have grown (21 percent versus 17 percent). While the number of regular users of 1-click accounts has remained the same year-over-year, more consumers have tried using them (67 percent vs. 65 percent).
Consumers are split evenly between payment options that are easiest to use, the one that gives them the best deal, and the most secure one.
- The survey found that more consumers are adopting digital wallets as a standard payment method, and 42 percent of digital wallet users said they were at least ‘somewhat confident’ leaving the house without their physical wallet.
- Gen Z and young millennials care more about seamless experiences (49 percent and 41 percent compared to 35 percent). In contrast, older millennials (ages 35 – 44) care more about saving the most money (31 percent compared to 27 percent).
Most consumers (62 percent) plan on shopping online and in-store.
- Consumers who made more than $100k a year report that they expected to do 61 percent of their shopping online (a 6-pt increase from 2021).
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Concerns over inflation mean savvier consumers.
The survey found that consumers will utilize buy now, pay later (BNPL) to help manage their budgets.
- Twenty percent of consumers said there were planning on using BNPL during the holiday season, and another 20 percent were on the fence.
- When promoting adoption, overcoming the initial barrier to entry matters for BNPL companies, as those who previously tried BNPL were 38 percent more likely to use it this holiday season than consumers who had never attempted BNPL.
While most consumers plan on spending about the same as they did last year (37 percent), overall sentiment towards holiday spending is down.
- Consumers will be savvier and look for ways to save money this holiday season. At the time of this survey, 62 percent said they were concerned about ‘getting the best deal’ on their purchases, and 66 percent were concerned about managing their budget.
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