2023
9
US Payment Preferences Market Report 2023
2023-05-11T04:04:20+01:00
OX1157871
3695
163178
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Report
en_GB
“The past couple of years have seen a rare reversal in trends within payment preferences, with credit cards declining as a top choice and cash climbing back upward. Recent economic…

US Payment Preferences Market Report 2023

£ 3,695 (Excl.Tax)

Description

Stay ahead of the curve in the US finance market with Mintel’s US Consumer Payment Preferences Market Report. Our full report is packed with consumer-led market intelligence, the latest consumer payment trends, and analysis of future trends and market opportunities. You’ll receive insights from our comprehensive consumer payments market research that will help you align your business strategies with audience demands.

Use this Report to Quickly Understand the Following Areas

  • Consumers’ payment preferences for general purchases.
  • Digital payment method usage.
  • Payment preferences for specific purchase types.
  • Consumer attitudes and behaviours toward financing options.
  • Online and mobile payment behaviours.

US Consumer Payment Preferences

  • US consumer payment trends: Cash has made a comeback. 2023 has seen cash increase in consumer payments, up 3% on 2021. The rising cost of credit card interest has driven consumers towards debt-free payments, as a result credit card use has fallen 2% after years of steady growth.
  • Payment services market share: Nearly one third of consumers used Cash App in the past year, a higher adoption level than Venmo or Zelle. Usage of Cash App has accelerated, bucking the trend of slowing growth for many digital payment options.
  • US consumer attitudes towards payments: Credit card users have grown accustomed to alternating between multiple payment types in order to maximise their rewards, with 58% of consumers using different cards across different categories.

Future US Consumer Payment Trends

While credit cards remain the top overall payment preference, Gen Z consumers far prefer using debit cards and cash. Gen Z’s aversion to credit cards suggests a future in which consumers alternate between an array of physical and digital payments rather than simply choosing between debit and credit.

Overall, consumers’ appetite for digital payments continues to expand rather than consolidate, broadening the competitive landscape.

To learn more about future trends in US payment preferences and opportunities for the financial services market, purchase our full US consumer payment preferences market report. For more information on the industry, take a look at our extensive financial services market research.

Popular Payment Service Providers Covered in this Report

PayPal, Cash App, Venmo, Zelle, Apple Pay, Google Pay, Perpay, Extra.

Expert Analysis from a Specialist in the Finance Industry

This report, written by Patrick Rahlfs, a senior analyst in the financial services sector, delivers in-depth commentary and analysis to highlight current payment trends in the US finance industry and add expert context to the numbers.

The past couple of years have seen a rare reversal in trends within payment preferences, with credit cards declining as a top choice and cash climbing back upward. Recent economic developments have had a significant impact on the payments space, with the pandemic driving digital payment adoption and inflation causing consumers to extend their usage of credit cards to deal with rising prices. A recognition from consumers of the dangerous compounding effects of higher card balances and rising interest rates has driven a resurgence of positive attitudes toward cash and debit as responsible ways to make payments and manage budgets.

Patrick Rahlfs, Senior Research Analyst

 

Patrick Rahlfs
Senior Research Analyst

Table of Contents

  1. Overview

    • What you need to know
      • This Report looks at the following areas
        • Definition
          • Market context
          • Executive Summary

              • Top takeaways
                • Consumer trends
                  • Cash makes a comeback
                    • Figure 1: General payment preference by year, 2019-2023
                  • Cash App surpasses Venmo and Zelle
                    • Figure 2: Digital payment usage by year, 2019-2023
                  • Gen Z’s preferences are flexible, with digital options gaining traction
                    • Figure 3: Gen Z payment preferences, 2023
                  • Competitive strategies
                    • Credit score is a recurring theme across multiple payment types
                      • Figure 4: Perpay BNPL paid Facebook ad, 2023
                    • Credit cards embrace balance transfers to allay debt concerns
                      • Figure 5: Share of credit card acquisition offers containing an introductory APR on balance transfers, 2020-23
                    • Market predictions
                      • Figure 6: Payment preferences category outlook, 2023-28
                    • Opportunities
                      • Rewards debit cards can offer value without risk
                        • Banking apps must improve budgeting tools
                          • Mobile wallet adoption can catalyze niche products
                          • Market Size

                            • Share of cash payments stabilized
                              • Figure 7: Share of payment instrument use for all payments, by year, 2016-2021
                            • In-person purchases rebounded after pandemic
                              • Figure 8: Share of purchases/P2P payment made in-person versus online or remote, 2016-21
                            • Online card payments surpassed in-person in total value
                              • Figure 9: Share of card payment by value, through in-person and remote channels, 2015-20
                            • Credit card originations remain strong
                              • Figure 10: Number of open credit card accounts, Q4 2012-Q4 2022
                          • Market Drivers

                            • Young consumers are most vulnerable to credit card delinquency
                              • Figure 11: Quarterly transition into serious delinquency (90+ days) for credit cards by age, 2015-23
                            • Credit card balances are rising
                              • Figure 12: Credit card debt balance, 2017-22
                            • Personal Savings Rate sits below 5%
                              • Figure 13: Personal Savings Rate, 2015-23
                            • Consumer Price Index is cooling, but is still elevated
                              • Figure 14: Year-over-year change in Consumer Price Index, 2015-23
                          • Competitive Strategies and Market Opportunities

                            • Cash App spotlights its Cash Card
                              • Figure 15: Cash App cash card online video ad, 2023
                            • Perpay focuses on credit score through BNPL
                              • Figure 16: Perpay buy now, pay later paid Facebook ad, 2023
                            • Fintech Extra introduced new TV ads for its credit-debit hybrid
                              • Figure 17: Extra Card national TV ad, 2023
                            • Zelle portrays cash as scary in national TV ads
                              • Figure 18: Zelle national TV ad, 2023
                          • Payments Preferences – Fast Facts

                            • Preferred Payment Methods

                              • Credit cards are the most preferred payment method
                                • Figure 19: Payment preferences, 2023
                              • Credit card popularity declines while cash and debit surge
                                • Figure 20: General payment preference by year, 2019-23
                              • Cash preference rose across all generations
                                • Figure 21: Cash as top payment preference, by generation, 2021 vs 2023
                              • Gen Z has the broadest preferences, signaling opportunity
                                • Figure 22: Gen Z payment preferences, 2023
                            • Digital Payment Method Usage

                              • Cash App became the second most popular digital payment method
                                • Figure 23: Digital payment usage, 2023
                              • More than half of Black consumers used Cash App in the past year
                                • Figure 24: Digital payment usage, by race and Hispanic origin, 2023
                              • Cash App accelerated growth while Zelle stagnated
                                • Figure 25: Digital payment usage by year, 2019-23
                              • Gen Z continue to embrace more digital payment methods
                                • Figure 26: Gen Z digital payment usage by year, 2021-23
                                • Figure 27: Number of online or mobile payment systems used, by generation, 2023
                            • Payment Preference by Purchase Type

                              • Credit cards lead among large and online purchases
                                • Figure 28: Payment method by purchase type, 2023
                              • Young consumers lean toward debit cards and PayPal on their phones
                                • Figure 29: Payment preference for making online purchases from a mobile device, by generation, 2023
                              • Older consumers growing to prefer charging large purchases
                                • Figure 30: Large purchases payment preference by generation, 2023
                            • Attitudes toward Financing Options

                              • More than one in five consumers have used BNPL through a retailer
                                • Figure 31: Attitudes toward financing purchases, 2023
                              • BNPL adoption has grown, with retailers still leading
                                • Figure 32: Attitudes toward financing purchases by year, 2021 vs 2023
                              • Gen Z hesitant to use BNPL on large purchases
                                • Figure 33: Attitudes toward financing purchases, by generation, 2023
                            • Mobile Payment Behaviors

                              • One in three consumers have their credit card stored in their phone
                                • Figure 34: Mobile payment behaviors, 2023
                              • Rise in digital payments boosts social media as a P2P channel
                                • Figure 35: Mobile payment behaviors by year, 2019-23
                            • Attitudes toward Payments

                              • Ease of use of smartphone payments allow cash to be a backup
                                • Figure 36: Attitudes toward smartphone payments and cash, 2021 vs 2023
                              • Higher-income consumers have charged more purchases in the past year
                                • Figure 37: Credit card and debit card usage, by household income, 2023
                              • Two in three Millennials have cards for specific categories
                                • Figure 38: Use of different credit cards for different purchase categories, by generations, 2023
                              • Parents used cards and BNPL more to cope with price environment
                                • Figure 39: Use of credit cards, debit cards, and BNPL, by parental status, 2023
                            • Appendix – Data Sources and Abbreviations

                              • Data sources
                                • Consumer survey data
                                  • Marketing creative
                                    • Abbreviations and terms
                                      • Abbreviations

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