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US Consumer Payment Preferences and Behaviors market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Consumer Payment Preferences and Behaviors market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Definition

This Report examines consumer payment behaviors and attitudes toward a variety of payment types. Subjects analyzed include:

  • Preferred payment type
  • Payment methods by purchase type
  • Mobile payment system use
  • Motivation to switch payment methods

Expert analysis from a specialist in the field

Written by Jennifer White Boehm, a leading analyst in the Financial Services sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Digital payments continue to garner a great deal of attention within the financial services industry, as innovation and technological advancements continue to push them forward. Consumer payment behaviors, however, are fairly engrained within older consumers. Financial services providers have an opportunity to highlight the security and efficiency of new payment processes, especially with younger and emerging generations who have yet to fully establish how they prefer to pay. Jennifer White Boehm
Associate Director - Financial Services

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Overview
          • The issues
            • While brands increasingly invest in new payment technologies, cash remains a consumer favorite
              • Figure 1: Preferred payment methods, June 2018
            • Inertia is an issue: most consumers see no need to change payment methods
              • Figure 2: Attitudes toward changing payment method, by age, June 2018
            • Security concerns remain an obstacle, especially for women
              • Figure 3: Factors in changing preferred payment type, by gender, June 2018
            • The opportunities
              • Mobile wallets are becoming more mainstream
                • Figure 4: Mobile wallet usage in the past year, June 2018
              • Many consumers use different cards when shopping online versus in-store
                • Figure 5: Payment behaviors, by race and ethnicity, June 2018
              • When trying to change consumer behavior, consider rewards and discounts
                • Figure 6: Factors in changing preferred payment type, June 2018
              • What it means
              • The Market – What You Need to Know

                • Noncash payment methods are rapidly growing in number of transactions and total value
                  • Total consumer credit accounts dip slightly, amidst long-term growth
                    • Online shopping is growing rapidly, but still comprises <10% of retail sales
                      • 9 out of 10 consumers owns a smartphone
                      • Market Breakdown

                        • Number and volume of noncash payments quickly growing
                          • Figure 7: number and value of credit card payments, in person versus remote, 2012, 2015, and 2016
                        • Debit cards are the most common form of noncash payment, but for the lowest value
                          • Figure 8: Distribution of noncash payments by type, number, and value, 2015
                        • Most consumers use a bank-issued debit and credit card
                          • Figure 9: Credit, debit, and mobile payment app usage, November 2017
                        • Total consumer credit accounts dip slightly, amidst long-term growth
                          • Figure 10: Number of consumer credit accounts, Q4 2012-Q4 2017
                        • Consumer debt reaches new heights
                          • Figure 11: Outstanding consumer credit, revolving and nonrevolving, 1985-2018
                      • Market Factors

                        • Online retail sales expected to increase rapidly
                          • Figure 12: Total US online retail sales and fan chart forecast, at current prices, 2012-22
                          • Figure 13: Total US online retail sales and forecast, at current prices, 2012-22
                        • Online shopping is growing rapidly, but still comprises a small share of total retail sales
                          • Figure 14: Total US retail sales and online sales, at current prices, 2012-17
                          • Figure 15: Percentage of total purchases online, March 2018
                        • 9 out of 10 consumers owns a smartphone
                          • Figure 16: Personal device ownership, by age, June 2018
                      • Key Players – What You Need to Know

                        • In the land of digital payments, PayPal is king
                          • Amazon Go stores re-imagine the purchase process
                            • Mobile wallet usage could soon begin to surge
                            • What’s Happening?

                              • With myriad options available, PayPal stands apart
                                • Figure 17: Payment methods used in the past year, by age, June 2018
                                • Figure 18: PayPal email, August 2018
                              • Point-of-sale microfinance emerges as a new payment method
                                • Figure 19: Affirm online advertisement, July 2018
                              • Costco now accepts Apple, Google, and Samsung mobile wallets at all US locations
                              • What’s Struggling?

                                • Scam artists take to Zelle to defraud customers
                                  • Inertia is a large barrier to changing current payment methods
                                    • Figure 20: Attitudes toward changing payment method, by age, June 2018
                                • What’s Next?

                                  • Mobile wallet usage could soon begin to surge
                                    • Figure 21: Attitudes toward mobile wallets, by age, June 2018
                                  • Amazon Go stores reimagine the purchase process
                                    • Volatility plagues cryptocurrency, but blockchain offers hope
                                        • Figure 22: USAA email, May 2018
                                      • Apple and Goldman Sachs team up for card launch
                                      • The Consumer – What You Need to Know

                                        • Credit and debit cards are the most preferred payment method
                                          • Cash is not going away anytime soon
                                            • PayPal enjoys robust popularity and market penetration
                                              • Mobile wallets continue to polarize, while gaining traction
                                                • Zelle overtakes Venmo in popularity
                                                  • One in ten 25–34-year-olds have used cryptocurrency
                                                  • Preferred Payment Type

                                                    • One word: “Plastics”
                                                      • Figure 23: Preferred payment methods, ranked, June 2018
                                                    • Credit and debit cards appeal to different ends of the age spectrum
                                                      • Figure 24: Preferred payment methods, by age, June 2018
                                                    • Cash is no longer king, though still royalty
                                                      • Figure 25: Preferred payment methods, June 2018
                                                      • Figure 26: Preferred payment methods, by race and ethnicity, June 2018
                                                    • PayPal is fourth-most popular consumer payment method
                                                      • Figure 27: Preferred payment methods, PayPal versus bank check, June 2018
                                                      • Figure 28: PayPal email, August 2018
                                                  • Digital Payment Methods

                                                    • Most consumers have used PayPal in the past year
                                                      • Figure 29: PayPal usage in the past year, June 2018
                                                    • Venmo vs. Zelle
                                                      • Figure 30: Venmo usage versus Zelle, June 2018
                                                    • Nearly 2 in 10 consumers have used a mobile wallet…
                                                      • Figure 31: Mobile wallet usage in the past year, June 2018
                                                    • …but even more consumers consider it a hassle
                                                      • Figure 32: Preferred payment methods, June 2018
                                                    • Walmart Pay is very competitive with other mobile wallets, especially in rural areas
                                                      • Figure 33: Mobile wallet usage in past year, June 2018
                                                  • Preferred Payment Method by Purchase Type

                                                    • Online and in-store, consumers use debit and credit for everyday purchases
                                                      • Figure 34: Preferred payment methods, in-store and online purchases, June 2018
                                                    • In-store, the young turn to cash and debit while older consumers use credit
                                                      • Figure 35: Preferred payment methods, in-store purchases, by age, June 2018
                                                    • Mobile shoppers use credit, debit, or PayPal, depending on their age
                                                      • Figure 36: Preferred payment methods, mobile purchases, by generation, June 2018
                                                    • For personal payments, cash is favored, with a litany of options vying for second
                                                      • Figure 37: Preferred payment methods, personal payments, by generation, June 2018
                                                    • Most consumers pay their bills via the Automated Clearing House
                                                      • Figure 38: Preferred payment methods, bills and recurring payments, by age, June 2018
                                                    • Large purchases call for credit cards
                                                      • Figure 39: Preferred payment methods, June 2018
                                                  • Factors in Changing Payment Method

                                                    • Rewards and discounts have the greatest conversion potential
                                                      • Figure 40: Factors in changing preferred payment type, June 2018
                                                      • Figure 41: American Express email, June 2018
                                                    • Security concerns remain an obstacle, especially for women
                                                      • Figure 42: Factors in changing preferred payment type, by gender, June 2018
                                                    • Ease of use and checkout efficiency can drive change
                                                      • Figure 43: Factors in changing preferred payment type, by gender, June 2018
                                                  • Payment Behaviors

                                                    • Nearly 30% of consumers prefer to use cash wherever possible
                                                      • Figure 44: Preferred payment methods, June 2018
                                                    • Only half of consumers use the same card in-store and online
                                                      • Figure 45: Payment behaviors, by race and ethnicity, June 2018
                                                    • Roughly one third of consumers use different cards based on rewards
                                                      • Figure 46: Payment behaviors, card usage based on rewards, by age and household income, June 2018
                                                    • One in ten 25–34-year-olds have used cryptocurrency
                                                      • Figure 47: Payment behaviors, use of cryptocurrency, June 2018
                                                  • Attitudes toward Payments

                                                    • Inertia is an issue: most consumers see no need to change methods
                                                      • Figure 48: Attitudes toward changing payment method, by age, June 2018
                                                    • Consumers are wary of merchants’ purchase-tracking ways
                                                      • Figure 49: Attitudes toward payments, June 2018
                                                    • Majority of young consumers feel mobile payment security is improving…
                                                      • Figure 50: Attitudes toward payments, June 2018
                                                    • …while most consumers are still afraid to store credit card data online
                                                      • Figure 51: Attitudes toward payments, fear of storing card data online, June 2018
                                                    • Cashless future: pipedream or reality?
                                                    • Appendix – Data Sources and Abbreviations

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