When it comes to payments, cash and cards still reign supreme
When it comes to payments, cash and cards still reign supreme. But one digital alternative is not far behind.
Those are among the key findings of a new study, “How America Pays,” by Blackhawk Network, that surveyed more than 1,000 Americans in March 2016 to examine preferences for traditional and emerging payments tools and the role payments play in consumers’ purchasing decisions.
The survey, now in its second year, found that while cash is still king, it is starting to decline slightly. Eighty-seven percent of Americans reported using cash to pay in the last year, down from 93% the year before. Sixity-nine percent used credit cards, up one percentage point from last year.
PayPal is the most popular digital option, with 67% using it in the last 12 months, up from 62% last year.
Check usage is declining, the survery noted. Sixty percent of Americans used checks in the last year, versus 68% the year before.
Not surprisingly, millennials use newer payments methods at a higher rate than the general population, including mobile wallets and peer-to-peer payments, and they use cash slightly less.
Among alternative payment methods, mobile wallet adoption, at 17%, is up 8% over last year.
Of consumers who have used mobile wallets and peer-to-peer payments, 80% report they are using mobile wallets the same amount or more than they did last year, and 73% are using peer-to-peer payments the same amount or more than they did last year. Adoption of these payments methods among smartphone owners is also significant: 33% have a mobile wallet and 6% use peer-to-peer payments.
“Consumers now have so many payment tools at their disposal; they can be selective about how they pay, and are even influenced on where to shop based on their experiences paying,” said David Tate, senior VP of products and marketing at Blackhawk Network, which offers prepaid gift cards, payments tools and rewards delivered via a convenient network.
In other key findings:
Shoppers still love gift cards. Eighty-four percent of shoppers plan to purchase more or the same amount of gift cards this year as they did last year. And 74% of consumers hope to receive gift cards this year.
Additionally, 57% of shoppers have unused gift cards and egifts right now, and more than half of shoppers would be interested in using a gift card exchange that is online or an in-store kiosk and 40% would be interested in a mobile app gift card exchange. Also, 44% of consumers plan to purchase gift cards for self-use this year—a trend that retailers and marketers are now seizing on.
Brand perception, loyalty linked to payment experience. Seventy-eight percent of the consumers report that their experience paying affects their overall perception of a website, and willingness to visit it again. Sixty-nine percent report their experience paying affects their perceptions of a store or restaurant and their willingness to go back.
To download an infograph detailing the research, go here