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Consumer Payment Preferences and Behaviors - US - September 2015

"The payment industry is undergoing massive changes, driven primarily by new technology that is affecting all aspects of the industry. There is a huge difference in payment preferences and expectations among generations, with younger generations shying away from the credit cards older generations love and embracing other methods of payment."

This report covers the following issues:

  • Fewer Millennials have credit cards
  • Mobile payment is growing, but usage is still low
  • Person-to-person payments also growing, but usage is still low

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Fewer Millennials have credit cards
            • Figure 1: Credit card ownership, by generation, July 2015
          • Mobile payment is growing, but usage is still low
            • Person-to-person payments also growing, but usage is still low
              • Figure 2: Synovus email ad for P2P services, 2015
            • The opportunities
              • Incentives will help drive mobile payment usage
                • Figure 3: Would begin using mobile payment system if had incentives, July 2015
                • Figure 4: Would increase use of mobile payment system if had incentive, July 2015
                • Figure 5: Discover online bill pay email ad, 2015
              • What it means
              • The Market – What You Need to Know

                • Consumers are paying off debt
                  • Mobile payments are coming of age
                    • Interest in prepaid cards is growing
                      • An improving economy
                        • Smartphone sales
                          • Interest in wearables
                          • Market Size and Forecast

                            • Credit card balances
                              • Figure 6: Credit card balance, Q1 2003-Q1 2015
                            • Prepaid cards
                            • Market Factors

                              • Strengthening economy
                                • Figure 7: Percentage change in GDP, Q4 2011-Q2 2015
                              • Consumer confidence
                                • Figure 8: University of Michigan Index of Consumer Sentiment January 2005-July 2015
                              • Growth of smartphones
                                • Figure 9: Total US volume sales and forecast of mobile phones, 2009-19
                              • Wearables are coming!
                                • Figure 10: Interest in wearables, by gender and age, and Hispanic origin, July 2015
                              • CHAID Analysis
                                • Figure 11: Interest in wearables – CHAID tree output – July 2015
                            • Key Players – What You Need to Know

                              • Most want cash rewards
                                • Millennials don’t like credit cards
                                  • Mobile payments are not yet mainstream
                                  • What’s Working?

                                    • Cash back rewards are most popular
                                      • Figure 12: Credit card reward preferences, by generation, July 2015
                                      • Figure 13: Share of offers, Q1 2013-Q1 2015
                                      • Figure 14: Discover It card mailing, 2015
                                    • Prepaid cards are gaining popularity in different areas
                                    • What’s Struggling?

                                      • Millennials don’t like credit cards
                                        • Figure 15: Credit card ownership, by generation, July 2015
                                        • Figure 16: Use of debit cards and prepaid cards, by generation, July 2015
                                        • Figure 17: American Express and Bank of America reward cards ads, 2015
                                      • Mobile payments are still struggling for mainstream usage
                                        • Figure 18: Methods of payment, by type of transaction, July 2015
                                      • How to increase usage?
                                        • Figure 19: Reasons would begin to use/use mobile payments more, by current use of mobile payments, July 2015
                                      • The future of mobile payment systems
                                      • What’s Next?

                                        • New payment systems
                                          • EMV Cards
                                            • Figure 20: EMV card
                                          • Wearables
                                          • The Consumer – What You Need to Know

                                            • Young people are a challenge for credit card issuers
                                              • Credit cards and rewards
                                                • Use of mobile payment systems
                                                  • Consumers who use mobile payment systems like them
                                                    • How to increase usage of mobile payment systems
                                                      • Debit and prepaid cards are popular debt management tools
                                                        • Banks versus billers online bill pay
                                                        • Who Owns Cards?

                                                          • Young people don’t like credit cards
                                                            • Figure 21: Credit card ownership, by generation, July 2015
                                                          • Debit card ownership is down
                                                            • Figure 22: Debit card ownership, by generation, July 2015
                                                          • Prepaid card ownership highest among mobile payment users
                                                            • Figure 23: Prepaid card ownership, by various demographic segments, July 2015
                                                        • How People Pay

                                                          • Small transactions
                                                            • Figure 24: Method of paying for small, everyday transactions, July 2015
                                                          • Medium transactions
                                                            • Figure 25: Method of paying for medium-priced items such as clothing in person, July 2015
                                                          • Large transactions
                                                            • Figure 26: Method of paying for large-ticket items such as a television or furniture in person, July 2015
                                                          • Online transactions
                                                            • Figure 27: Method of paying for any online purchase, July 2015
                                                          • Paying bills
                                                            • Figure 28: Method of paying bills, July 2015
                                                            • Figure 29: Capital City Bank and First Merit Bank online pay incentive email ads, 2015
                                                          • Money owed family and friends
                                                            • Figure 30: Method of paying money owed friends and family, July 2015
                                                          • The future of P2P
                                                            • Debit cards are a popular payment method
                                                            • Changes in Payment Methods

                                                              • Attitudes toward Credit Cards

                                                                • Using cards for rewards
                                                                  • Figure 31: Use credit cards to get rewards, by demographics, July 2015
                                                                • Cash back is king
                                                                  • Figure 32: Reward card preference, by generation, July 2015
                                                                • Purchases affect choice of card
                                                                  • Figure 33: Different cards owned, by household income, July 2015
                                                              • Who Uses Mobile Payment Systems

                                                                • Millennials, Hispanics, urban dwellers, and parents
                                                                  • Figure 34: Use of mobile payment system, by various demographic groups, July 2015
                                                                • Mobile payments are used more by those with higher incomes
                                                                  • Figure 35: Use of mobile payment system, by household income, July 2015
                                                                • Apple Pay? Google Wallet? Other?
                                                                  • Figure 36: Use of specific mobile payment system, by demographic segments, July 2015
                                                                • Satisfaction with mobile payment systems is high
                                                                  • Figure 37: Satisfaction with mobile payment systems, by demographic groups, July 2015
                                                                • Apple users are more satisfied than Google users
                                                                  • Figure 38: Customer satisfaction, by mobile payment provider, July 2015
                                                                • What do Apple Pay and Google Wallet users want?
                                                                  • Figure 39: Reasons mobile payment system user would increase use, by mobile payment system, July 2015
                                                                • Who is most likely to use mobile payment systems?
                                                                  • Figure 40: Key Driver Analysis – Who uses mobile payment systems, July 2015
                                                              • Encouraging Consumers to Use Mobile Payment Systems

                                                                • Incentives, incentives, incentives...and security
                                                                    • Figure 41: Reasons consumers would begin using mobile payment system, by generation, July 2015
                                                                  • Availability at more stores would help, too
                                                                      • Figure 42: Reasons Millennials would increase usage of mobile payment systems, July 2015
                                                                    • Better communication is necessary
                                                                      • Figure 43: Mobile payments are too complicated, by demographics, July 2015
                                                                    • Still resistance to mobile payments
                                                                    • Attitudes about Payment Methods

                                                                      • Cards help consumers stay out of debt
                                                                        • Figure 44: Using cards to stay out of debt, by demographics, July 2015
                                                                      • Is it necessary to carry cash?
                                                                      • Method of Bill Paying

                                                                        • Online bill pay
                                                                          • Figure 45: Online bill pay preferences, by generation, July 2015
                                                                        • More pay bills with tablets than with phones
                                                                          • Figure 46: Use of mobile payment services, by generation, July 2015
                                                                      • Appendix – Data Sources and Abbreviations

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

                                                                                      • Methodology
                                                                                        • Figure 47: Interest in wearables – CHAID – Table output, July 2015
                                                                                    • Appendix – Key Driver Analysis Methodology

                                                                                      • Appendix – The Consumer

                                                                                          • Figure 48: Use of mobile payment systems, July 2015
                                                                                          • Figure 49: Paying for small, everyday transactions, by household income, July 2015
                                                                                          • Figure 50: Paying for medium-priced items such as clothing in person, by generation, race, July 2015
                                                                                          • Figure 51: Paying for large-ticket items such as a television or furniture in person, by generation, race, July 2015
                                                                                          • Figure 52: Paying for any online purchase, by generation, July 2015
                                                                                          • Figure 53: Mobile payment system usage, by age, household income, July 2015

                                                                                      Companies Covered

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                                                                                      Consumer Payment Preferences and Behaviors - US - September 2015

                                                                                      £3,199.84 (Excl.Tax)