Survey indicates that consumers living on low to moderate incomes are seeking savings solutions within their coResearch shows that making saving easy increases the likelihood that people will save. A new study from the national nonprofit Commonwealth is uncovering the potential of digital wallets to address this need and have a positive impact on the financial security of consumers living on low to moderate incomes – particularly through creating options for savings within the apps. While digital wallet and contactless payment adoption accelerated, the pandemic had a disproportionate financial impact on the financial wellness of people who live on low and moderate incomes (LMI). Digital Payments and the New Opportunity to Increase Savings examined how households with LMI are using digital wallets and payment apps, and explored opportunities to introduce savings solutions that enhance the financial security of consumers with LMI.ntactless payment apps and digital wallets.
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Commonwealth surveyed nearly 650 people living on low and moderate incomes, oversampling for Black, Latinx and women participants, to understand the current usage of contactless payment apps and digital wallets and to explore opportunities to offer high-quality savings solutions. This research, which was made possible by MetLife Foundation, highlights a largely untapped business opportunity for contactless payment apps and digital wallet providers to offer new products that will build customer engagement by better meeting and supporting their needs.
Key Findings from the Survey Included:
- Americans with LMI have integrated these apps into their daily financial lives, using them to pay friends and family, pay recurring bills, and store money. The apps addressed in this research were: PayPal, Cash App, Venmo, Apple Pay/Apple Cash, Google Pay and Amazon Pay.
- 79% of respondents with LMI said they’d likely use a savings solution if it were integrated into their contactless payment app, with emergency savings and saving for short-term expenses as the top savings goals.
- Black and Latinx respondents were more likely than white respondents to be using these apps for recurring payments, and are also more likely to be interested in a potential savings product. This presents a unique opportunity to provide a savings product and increase savings for these groups, who disproportionately experience financial insecurity due in large part to longstanding, systemic racism.
- Consumers with LMI were largely comfortable using these apps – indicating convenience and trust in the products and suggesting a higher likelihood of adopting additional services that meet their needs.
- Users leave more money in the app when they think of it as savings, providing a strong business opportunity for providers to increase share of wallet and active engagement.
- Customers with LMI prioritize trust and convenience, including fee transparency, reliability, ease of use, privacy and security.
- Respondents were interested in creative savings interventions, such as Round up savings, saving cash-back rewards, and saving money through discounts. Respondents prefer automated savings with control.
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“The accelerated adoption of contactless payment apps and digital wallets, and the integral part they play in the financial lives of consumers living on low and moderate incomes, opens a tremendous social and business opportunity for the companies developing the technology,” said Commonwealth Co-Founder and Executive Director, Timothy Flacke. “Considering the trust that consumers have in these apps, and their high level of interest in using them to save, product providers have an opportunity to build inclusive and innovative savings opportunities that support the financial security of LMI people while building a loyal and engaged customer base.”
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