New Marqeta research shows a shift in consumer behavior due to COVID-19 and higher adoption of digital payment solutions.
Marqeta, the global modern card issuing platform, released the third part of its 2020 State of Payments Report, based on a survey of 2,000 U.S. consumers. The survey looks at how COVID-19 has impacted consumer shopping behaviors and led to the rising adoption of payment solutions, many of which built on modern card issuing infrastructure. According to the findings, since the pandemic began 65% of consumers made a purchase on a platform, app, or at a store for the first time. With the influx of new customers, modern card issuing has enabled many of these payment solutions — including peer-to-peer payment apps, on-demand delivery services, and Buy Now, Pay Later solutions — to scale to meet the demand of their growing customer base.
“We believe that solutions such as peer-to-peer payments, on-demand delivery and Buy Now, Pay Later solutions, have shifted from being a convenience to becoming essential. In a world now where health and safety is the top concern and cash flow is tight, demand has surged for these solutions. It has become more important than ever for companies to have access to modern technology to be able to scale quickly as they hire millions of gig workers and onboard dozens of merchants to keep up with accelerating consumer demand. Every week lost grappling with legacy technology, is revenue lost to more agile competitors,” comments Vidya Peters, Chief Marketing Officer at Marqeta.
The study of 2,000 consumers showed that the use of peer-to-peer payment solutions almost doubled compared to 2019. Peer-to-peer payment apps allow consumers to send and receive contact-free payments directly to family or friends within minutes. Seventy-seven percent of consumers surveyed said they used a peer-to-peer payment app in 2020, compared to 42% in 2019. The majority of consumers surveyed by Marqeta (89%) expect to continue using their peer-to-peer payment apps with the same frequency in the future. Further, consumer use of payment solutions including on-demand delivery services and Buy Now, Pay Later solutions also saw a surge in use, with new adoption expected to stay high:
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- On-demand delivery services became essential throughout the pandemic and provided consumers with safe, convenient, and fast access to food and groceries. According to the survey, the number of consumers who said they used on-demand delivery services almost doubled in 2020 (63%) compared to 2019 (32%). Furthermore, 62% percent of consumers plan to use on-demand delivery services with the same frequency after COVID-19.
- Buy Now, Pay Later solutions continued to grow in popularity in 2020 as they provided consumers with flexible, more affordable payment options during the current economic downturn. More than one-third of all consumers surveyed (37%) say they have used a Buy Now, Pay Later service, and 74% of these consumers used one for the first time since COVID-19 began. Additionally, 80% of Buy Now, Pay Later users said they have increased use to some degree since the pandemic began.
Consumers appear drawn to digital payments to make purchases, and our survey shows that COVID-19 has accelerated their adoption nationwide. The new payment landscape is one where consumers have options and are able to shop safely through flexible and secure payment solutions. Modern card issuing enables many of these solutions to meet consumers where they are and provide seamless payment experiences globally, at scale.
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