Sorry for interrupting, this website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Learn more
Accept & Close

Consumer Payment Preferences and Behaviors - US - August 2016

"Increases in consumer spending and interest in technology foster a payments environment ready for continued innovation. Purchases via card are climbing, but consumers don’t feel totally comfortable leaving their house without cash. In a world where our lives are so digitized and move so quickly, financial institutions need to do more to allay security concerns; most consumers still do not feel comfortable embracing new forms of payment technology, including mobile pay. Younger consumers are more willing to embrace technological advances like P2P (peer-to-peer) payments, but the older audience remains skeptical."
- Jennifer White Boehm, Associate Director - Financial Services

This report discusses the following key topics:

  • Consumers are slow to adopt new payment methods
  • Retailers are slow to adopt new payment systems
  • Worries about security surround mobile payment systems
  • Consumers are uncomfortable leaving home without cash

This report is an analysis of the ways in which consumers pay for their transactions, specifically focusing on what they use to pay for their purchases, their attitudes towards digital payments and how those opinions may have changed

What you get

What's included

Why buy from us?

Succeed

Our reports will provide you with market data, consumer research and competitive intelligence to succeed in your market.

Instant Access

Buy now and you'll have instant access to the information you need to make the right decisions.

Opportunities

Find out what's next in the markets that matter to you: where opportunities lie and what challenges you will face.

Trusted

A business Superbrand, Mintel is a source you can trust. We have been defining and refining the Market Intelligence mix since 1972.

Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Consumers are slow to adopt new payment methods
            • Retailers are slow to adopt new payment systems
              • Worries about security surround mobile payment systems
                • Figure 1: Attitudes towards payment methods, June 2016
              • Consumers are uncomfortable leaving home without cash
                • Figure 2: Attitudes towards payment methods, by generations, June 2016
              • The opportunities
                • Noncash payments are on the rise
                  • Figure 3: Total of noncash payments, 2000-12
                • Consumers look for rewards or discounts for using mobile pay and credit cards
                  • Most consumers consider mobile payments necessary
                    • Figure 4: Attitudes towards payment methods, June 2016
                  • What it means
                  • The Market – What You Need to Know

                    • Majority of consumers own credit or debit cards
                      • Non-cash payments are on the rise
                        • One quarter of consumers have used a mobile payment system
                          • Financial situations are “healthy”
                          • Market Size

                            • Noncash payments are on the rise
                              • Figure 5: Total of noncash payments, 2000-12
                            • Majority of consumers own credit or debit cards
                              • Figure 6: Credit card ownership, March 2016
                            • Credit card use has increased, but debit cards used most often
                              • Figure 7: Number and growth of noncash payments, 2000-12
                          • Market Factors

                            • Consumer Sentiment Index slightly down, but generally positive
                              • Figure 8: Consumer Sentiment Index, January 2007-May 2016
                            • Financial situations are “healthy”
                              • Figure 9: Perceptions of financial health, 2013-16
                            • Spending due to increase or stay the same in a wide variety of categories
                              • Figure 10: Perceived changes in spending – Spending more or about the same, by category, January 2016
                            • Most mobile phone users have smartphones
                              • Figure 11: Smartphone usage, by race/ethnicity, June 2013-16
                            • One quarter of consumers have used a mobile payment system
                              • Figure 12: Mobile payment systems used, June 2016
                          • Key Players – What You Need to Know

                            • Consumers continue to look for streamlined payments
                              • The wallet comes out of your pocket and into your phone
                                • Amazon and Google look to lead the way with new payment technologies
                                • What’s Working?

                                  • Credit cards remain most popular way to pay in person and online
                                    • Most consider the future of mobile payments “necessary”
                                      • Younger, affluent consumers more willing to be tracked by merchants
                                        • Use of prepaid or debit cards keeps consumers out of debt
                                          • Digital wallet launches encourage payments innovation
                                            • EMV cards may contribute to decline in counterfeit card transactions
                                            • What’s Struggling?

                                              • Retailers slow to adopt new payment systems
                                                • The transition to EMV chip-and-PIN cards has been rocky
                                                  • Security is hampering mobile payment use
                                                    • Some still consider mobile payment to be “too complicated”
                                                      • Interest in wearable payment technology has not increased
                                                      • What’s Next?

                                                        • EMV transactions need to speed up
                                                          • Wearables go beyond the watch
                                                            • Fitbit and Jawbone
                                                              • Visa
                                                                • Amazon looks to lead the way in voice payments
                                                                  • Google goes hands-free
                                                                    • Big banks seek partnerships with financial disruptors
                                                                      • J.P. Morgan
                                                                        • Citibank
                                                                          • Judge rules that Bitcoin is not really money
                                                                          • A More Efficient Payments Process

                                                                            • Retailers slow to adopt new payment systems
                                                                              • EMV chip-and-PIN
                                                                                • Mobile pay
                                                                                  • Sam’s Club Scan & Go App
                                                                                    • Figure 13: Ease of mobile payment options, by current users, June 2016
                                                                                  • A streamlined, seamless payments process is considered ideal
                                                                                    • Figure 14: PayPal email highlighting ease of payment, 2016
                                                                                    • Figure 15: PayPal email highlighting ease of linking funding sources to PayPal, 2016
                                                                                    • Figure 16: Discover email highlighting Android Pay, 2016
                                                                                  • One-click and in-app purchasing shorten shopping times even further
                                                                                    • Domino’s
                                                                                      • Figure 17: Domino’s zero click ordering email, 2016
                                                                                    • Stripe’s Relay
                                                                                    • The Consumer – What You Need to Know

                                                                                      • Credit cards remain most popular way to pay in person and online
                                                                                        • Preferred method of payment remains consistent, with one exception
                                                                                          • Cash is still preferred for personal payments
                                                                                            • Millennials most likely to use mobile payments
                                                                                              • A streamlined, seamless payments process is considered ideal
                                                                                              • How People Pay

                                                                                                • Credit cards remain the most popular way to pay in person and online
                                                                                                  • Figure 18: Payment method used, all purchase types, June 2016
                                                                                                • Small transactions
                                                                                                  • Figure 19: Payment method used, purchasing small everyday items such as gasoline & food in person, June 2016
                                                                                                • Medium transactions
                                                                                                  • Figure 20: Payment method used, purchasing medium priced items such as clothing in person, June 2016
                                                                                                • Large transactions
                                                                                                  • Figure 21: Payment method used, purchasing large ticket items such as a television or furniture in person, June 2016
                                                                                                • Online transactions
                                                                                                  • Figure 22: Payment method used, any online purchase, June 2016
                                                                                                • Paying bills
                                                                                                  • Figure 23: Payment method used, paying bills such as mortgage payments or utilities, June 2016
                                                                                              • P2P Payments – Why Do Consumers Still Use Cash?

                                                                                                • Cash is still the most popular for personal payments
                                                                                                    • Figure 24: Cash payment preferences, June 2016
                                                                                                  • Younger Millennials’ adoption of P2P payments is the highest
                                                                                                    • Figure 25: Cash versus P2P payment preferences, by generation, June 2016
                                                                                                    • Figure 26: Chase online ad for Quickpay, March 2015
                                                                                                    • Figure 27: Venmo email detailing new payment capabilities, July 2016
                                                                                                • Attitudes toward Payment Methods

                                                                                                  • Over half of consumers still unwilling to leave home without cash
                                                                                                    • Figure 28: Comfort level, leaving home without cash, by generation, June 2016
                                                                                                  • Most consider the future of mobile payments “necessary”
                                                                                                    • Figure 29: Consumer belief in future acceptance of mobile payments, by age, June 2016
                                                                                                  • Interest in wearables for purchasing has not increased year over year
                                                                                                    • Figure 30: Interest in using wearables to pay for merchandise, by household income, June 2016
                                                                                                  • Hispanics most interested in wearable use at retailers
                                                                                                    • Figure 31: Interest in using wearables to pay for merchandise, by race/ethnicity, June 2016
                                                                                                  • Younger, affluent consumers more willing to be tracked by merchants
                                                                                                    • Figure 32: CHAID analysis, attitude towards being tracked by merchants, June 2016
                                                                                                    • Figure 33: Attitude toward payment options – CHAID – Table output, June 2016
                                                                                                • Mobile Payments

                                                                                                  • One quarter of consumers have used a mobile payment system
                                                                                                    • Figure 34: Mobile payment systems used, June 2016
                                                                                                  • Millennials most likely to use mobile payments
                                                                                                    • Figure 35: Mobile payment systems used, by generation, June 2016
                                                                                                  • Hispanic and White consumers use Apple Pay and Google Wallet
                                                                                                    • Figure 36: Mobile payment systems used, by race/ethnicity, June 2016
                                                                                                  • Some still consider mobile payment to be “too complicated”
                                                                                                    • Figure 37: Attitude toward using smartphone to pay in a store, by age, June 2016
                                                                                                • Cards in the Digital Wallet

                                                                                                  • Credit cards are narrowly preferred in the digital wallet
                                                                                                    • Figure 38: Primary card in digital wallet, June 2016
                                                                                                  • Consumers aged 18-24 most likely to pay with debit card via mobile
                                                                                                    • Figure 39: Primary card in digital wallet, by age, June 2016
                                                                                                • Increasing Mobile Payment Usage

                                                                                                  • Consumers still look for rewards/incentives to increase mobile payments
                                                                                                    • Figure 40: Mobile payment usage motivation, by current users, June 2016
                                                                                                  • Security is hampering mobile payment use
                                                                                                    • Figure 41: Mobile usage increase based on security and acceptance of mobile payments, by current users, June 2016
                                                                                                  • Current mobile pay adopters look to retailers for usage opportunity
                                                                                                    • Figure 42: Mobile payment usage motivation, by mobile payment provider, June 2016
                                                                                                  • Most consider the future of mobile payments “necessary”
                                                                                                    • Figure 43: Attitudes towards the future of mobile payment methods, by age, June 2016
                                                                                                • Encouraging Mobile Payment Usage Among Non-users

                                                                                                  • Non-users will need lots of convincing
                                                                                                    • Figure 44: Incidence of those who do not want to use mobile payments, by age, June 2016
                                                                                                  • Security fears still haunt mobile payments, but rewards/discounts could be tempting
                                                                                                    • Figure 45: Mobile payment usage motivation, by non-users, June 2016
                                                                                                • Debt Management

                                                                                                  • Debit, prepaid cards still considered good ways to stay out of debt
                                                                                                    • Figure 46: Agreement that debit cards and prepaid cards help manage debt, June 2016
                                                                                                  • The majority of consumers believe they have manageable debt levels
                                                                                                    • Figure 47: Consumer debt levels, March 2016
                                                                                                • Bill Payment

                                                                                                  • Most consumers still prefer to receive and pay for bills offline
                                                                                                    • Figure 48: Bill pay behaviors, June 2016
                                                                                                  • Younger consumers more likely to receive bills online
                                                                                                    • Figure 49: Bill pay behaviors, prefer to receive bills online, by demographics, June 2016
                                                                                                  • Bill payment is most often completed via check
                                                                                                    • Figure 50: Payment method used, paying bills such as mortgage payments or utilities, by age, June 2016
                                                                                                  • Plastiq looks to bring more cards to bill payment
                                                                                                  • Appendix – Data Sources and Abbreviations

                                                                                                    • Data sources
                                                                                                      • Consumer survey data
                                                                                                        • Direct marketing creative
                                                                                                          • Abbreviations and terms
                                                                                                            • Abbreviations
                                                                                                              • Terms
                                                                                                              • Appendix – CHAID Analysis Methodology

                                                                                                                • CHAID
                                                                                                                  • Figure 51: CHAID analysis, attitude towards being tracked by merchants, June 2016

                                                                                                              Companies Covered

                                                                                                              To learn more about the companies covered in this report please contact us.

                                                                                                              Consumer Payment Preferences and Behaviors - US - August 2016

                                                                                                              £3,199.84 (Excl.Tax)