Against this backdrop, consumers surveyed reported growing demand for Accelerated Wage Access: One out of five US consumers said they would give up a full week of paid time off (PTO) if they could get daily access to their wages
While financial analysts have downgraded the likelihood of a recession to 20% in the next 12 months, lingering recessionary fears are causing consumers to still cut spending according to the Q3 2023 Consumer Pulse Report released by Marqeta, the global modern card issuing platform. The new report surveyed 3,000 consumers in the US and the UK in partnership with Propeller Insights, showing that against this backdrop of economic uncertainty, consumers are reevaluating how new technologies can help them manage their finances and are flocking to embedded finance offerings including Accelerated Wage Access to help them gain access to wages faster. In addition, consumers are showing demand for seamless and delightful shopping experiences along with newfound interest in how Generative AI solutions can help them reduce spending and guide savings.
“Consumers are demanding seamless touch points at every stage of the customer lifecycle. Our report shows the opportunity for companies to think about how they can boost customer loyalty and offer embedded finance solutions that elevate their customer experiences and promote financial empowerment.”
Marqeta’s Q3 Consumer Pulse report is the second of its kind where the company has surveyed consumers to get a pulse check on how they’re adapting to the changing financial landscape. According to the survey, despite an improved economic outlook, consumers are feeling the crunch as living costs remain high. Eighty-six percent of consumers surveyed reported being concerned about an impending recession and the majority (67%) are changing their financial habits in order to cut spending.
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Daily Wage Access Trumps Other Conveniences
According to the report, embedded finance solutions that offer accelerated access to wages are striking a chord with consumers, enabling them to access their wages sooner to help keep up with rising interest rates and inflation. Over two-thirds of consumers surveyed (66%) said that if presented with a choice, they would sacrifice something important to them to get paid daily– the most popular being a year of takeout food (29%), social media access (27%), or haircuts (25%). The appeal for daily access to wages was highest in the US, with 21% of surveyed consumers saying that they would give up an entire week of PTO, compared with 15% in the UK, and 16% saying that they’d give up their retirement savings in order to get daily access to their paychecks, compared with 10% in the UK – underlining the desire for a transformation in how workers get paid in today’s economy.
A Seamless Payments Experience More Important Than Corporate Values
When it comes to brand loyalty, consumers reported the importance of the customer experience. Brand loyalty relies heavily on ensuring a seamless customer journey, from the start of the shopping experience to the checkout and payment process. Almost three-quarters of consumers surveyed (72%) said they are likely to be more loyal to a brand because it offers a better customer experience when they purchase a product or service, including fast checkout, quick shipping, or the ability to pay with a phone or earn rewards. Eighty-five percent of consumers think the checkout or payment experience is more important than a company’s corporate values or social positions when purchasing from a brand – especially critical for brands as discretionary spending increases.
“Today, there is no room for anything less than a stellar customer experience,” said Rachel Huber, Marqeta’s Market Intelligence Lead. “Consumers are demanding seamless touch points at every stage of the customer lifecycle. Our report shows the opportunity for companies to think about how they can boost customer loyalty and offer embedded finance solutions that elevate their customer experiences and promote financial empowerment.”
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Consumers Are Ready For Generative AI to Generate “Money”
With economic uncertainty taking hold, Marqeta’s report reveals that consumers are increasingly open to leveraging Generative AI tools to help them with their financial planning, including budgeting, investing and how to increase their savings. Over one-third (36%) of consumers surveyed said they’d be interested in using Generative AI to manage their finances, with that number increasing to over 50% for individuals younger than 50 years old. US consumers reported being more open to Generative AI than UK consumers, with 40% agreeing that they’re open to Generative AI tools, compared to 29% in the UK.
“Generative AI has the potential to be a force for good when it comes to financial management,” said Huber. “What our findings show is that after a year of unrelenting rises in living expenses, consumers are open to emerging technologies that could provide support and unlock new ways to improve financial well-being.”
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