More Ways to Pay

Alternative payment methods are beginning to become a staple in consumers’ lives.  In the past two years alone, dozens of new payment options have been released — all claiming to be the easiest and safest way to pay.  Earlier this year, we found that consumers are open to using cryptocurrency.  Our research shows that consumers are aware of these new digital payment options, and they plan to use them in the future. They even expect to pay in new ways that have yet to be invented.

Online: PayPal is top of wallet, and consumers also anticipate something new

Our Future of Money Study found that PayPal is the most popular alternative payment method for online purchases today (24%), following traditional credit (28%) and debit cards (27%).  The majority of people we surveyed use PayPal as a true digital wallet.  We found that Americans keep more money in PayPal than cash in their wallet.  The majority (69%) of people with money in their PayPal account say that this money has been sitting in their account for less than a month and is typically there for 9 days.

However, consumers are anticipating paying in new ways in the future.  Our results found that people do not expect to use existing forms of payment as frequently in the next five years.  We recently wrote about what consumers want to see in the future of financial tools.  It is clear that consumers are ready for new alternative payment options to enter their lives.  In fact, 12% of consumers say that in five years, they will prefer to purchase things online with a form of payment that hasn’t been invented yet.

In Person: Debit Cards Are Most Preferred, But Not For Long

When buying items in person today, consumers say their first choice is debit cards (34%), followed by cash (30%) and credit cards (22%).  Digital payments are last in the list, with only 6%. In five years, however, consumers expect to look elsewhere for their payment options and say they will use cash less often than they do today (18%).  Consumers also report they expect to use debit (24%) and credit cards (18%) less often, giving rise to new forms of payment.  In fact, our research found that people are nearly 4x more likely to use a digital app for in person payments within five years from now (6% now vs. 23% in the future).

Consumers are seeking the next big innovation in their payment options.
How will you innovate? engage@logicaresearch.com