Retailers need to provide a variety of frictionless payment options to avoid losing customers and sales.
According to the “2021 State of Payments Report” from customer messaging platform Podium, being offered convenient payment options is the second most important factor consumers consider when choosing a local business (41%), next to customer service (60%). Preferred payment options were more important to customers than proximity to their home (36%), availability of sales or discounts (25%) or a personal relationship with the business (20%).
Digital payment options—including website payments, mobile wallets such as Apple Pay and Google Pay, direct pay platforms like Venmo or Paypal, and text links—were the top payment choice for 20% of consumers. If a retailer only accepts cash and credit card swipes, they are missing the top payment choices of 31% of U.S. consumers.
Examining the payment preferences of high-income consumers with household income of greater than $100,000 per year, 38% have delayed payment or abandoned a transaction because their preferred payment method was not offered, 74% higher than the typical consumer.
In addition, almost six in 10 (58%) high-income consumers were more likely to avoid retailers that failed to offer contactless payment methods. And nearly two-thirds (64%) of high-income consumers who have tried text payments either liked or strongly liked it.
Other findings include:
• Nearly three in four (72%) respondents reported the changes to their preferred payment methods due to COVID-19 are likely to last beyond the pandemic.
• Respondents are 43% more comfortable spending money swiping their credit card than paying with cash, and 53% more compared to reading their credit card numbers over the phone to a representative.
• One-third of all respondents listed swiping or inserting their credit cards as their preferred method of payment, and nearly one-quarter abandon transactions entirely when their preferred methods of payment aren't available.
"With the current digital transformation and pandemic-induced pressures, payments have evolved from 'how you get paid' to playing a critical role in your business' customer experience," said Eric Rea, co-founder and CEO at Podium.