The payments landscape continues to evolve rapidly amidst an uncertain economic outlook. For the second year in a row, Primax set out to gauge the current state of payment preferences among financial institution customers in the 2022 Primax Payments Pulse study. In this annual research, Primax explores the factors influencing consumers’ choice and usage of different payment methods, as well as how these factors may vary among different life stages and economic events. Key takeaways are provided for banks to look to when making decisions and optimizing offerings that adapt to the evolving preferences and needs of their customers — to better serve them now and in the future.
In this first blog from our 2022 study, we explore what influences consumer behavior regarding choice and usage of payment methods.
Consumers Want Choice and Variety
As a result of the economic landscape, consumers are looking for more choice and variety when it comes to payments preferences and behaviors. The availability of a wide range of products, services, and offerings can help consumers feel an increased sense of control, especially when the economy is unpredictable. More than half of consumers (61%) said they are using a greater variety of payment methods now than they did a few years ago. More than three-quarters said that, in the next six months, they planned to use at least one of the methods most readily available – debit, credit and cash – to pay for goods and services.
Yet consumers are not just reaching for their traditional wallets: nearly six in 10 bank customers plan to use a digital payment solution like Venmo in the next six months and approximately four in 10 expect to use their mobile wallet or store-specific mobile payment app to pay for goods and services. Consumers even want flexibility when it comes to their mobile wallets. Nearly one-third (32%) of respondents have loaded both a debit and credit card into their mobile wallet, up from 25% in 2021.
The importance of variety and choice also drives how customers prefer to interact with their trusted financial partners. Nearly half of bank customers report they prefer to visit a branch (47%), go onto the bank’s website (46%) or call their bank on the phone (45%). This is followed by 33% who report they prefer their bank’s mobile app, 20% who prefer email and 19% who prefer online chat.
Convenience and Ease of Use are Driving Preferences
Bank customers are not only looking for variety and choice in their payment methods – they are also leaning into convenient and easy-to-use experiences. They are avid online shoppers, with only 2% reporting they never shop online. More than half (63%) use mobile apps like Uber Eats or Instacart for food pick-up or delivery at least a few times per year, a 31% increase since 2021. There was also a 23% increase in bank customers reporting they turn to mobile apps or websites to order ahead for grocery pick-up or delivery. In addition, 56% of bank customers say they typically make payments or conduct banking online, a 37% increase from 2019.
Convenience, ease of use and speed were reported as the top three reasons consumers turn to mobile wallets and contactless cards. When a card is lost or stolen, bank customers want the opportunity to use a digital card until their new physical card arrives. One in four (25%) was issued a digital card to use for online purchases while waiting for their new plastic, 83% of whom used it.
Frictionless Experiences
The adoption of mobile wallets and contactless payments has increased quickly among bank customers. Since 2021, there has been an increase of 33% in mobile wallet usage, with 49% of customers using a mobile wallet at least a few times per year and 30% using a mobile wallet on a monthly basis. Nearly nine in 10 bank customers who have a contactless card reported using it at least a few times per year. There was also a 42% increase in respondents that prefer to tap-and-go with a contactless card, mobile wallet or wearable when making a purchase at the point of sale.
While contactless usage continues to increase, there are still many bank customers who have not turned to a mobile wallet. Of those who do not use a mobile wallet, 42% say it is because they do not know what it is or how to use it, while 30% say they feel mobile wallets are not secure. While 38% of respondents in 2020 reported using contactless cards because they were physically safe, that same metric has decreased by 34% in 2022’s survey.
Download the full 2022 Primax Payments Pulse study to help your financial institution develop successful payment strategies.
Brian Scott partners with industry leaders in payments and community financial institutions to create competitive payments programs, helping financial institutions position themselves competitively in their own communities and maintain profitability throughout their payments programs. Brian spent 23 years in the highly competitive consumer payments marketplace and is a recognized leader in payments solutions and innovative technologies. He is a frequent speaker on the future of payments, new payments trends, mobile banking, alternative payments, and how new payments technologies will transform the current banking space.
