Future of Payments? Consumers Turn to Digital Wallets Amid COVID-193 min read
For some years now, consumers have been using cash and debit and credits cards less and less and turning to their digital wallets. According to new data, the recent pandemic has pushed this trend even further.
In April, The Strawhecker Group (TSG), an analytics and consulting firm, conducted a poll that aimed to better understand the impact of COVID-19 on how consumers pay for goods and services. TSG discovered that credit and debit card usage has declined 38 percent since the start of the pandemic. Meanwhile, regular mobile/digital wallet users have increased by 43 percent. It also comes as no surprise that cash use has declined over the last couple of months.
“On average only about 52 percent of consumers surveyed regularly used cash before the pandemic. Since then, 42 percent of these respondents stated that they have decreased their use of cash, likely in an effort to minimize the spread of germs,” states the report. And a majority of consumers stated they do not intend to use cash regularly once pandemic restrictions have lifted.
So, how are consumers choosing to make purchases for goods and services? Which processors do they prefer and regularly use? The most popular digital wallets include PayPal, Venmo, Apple Pay, Google Pay, Cash App, Zelle, Amazon Pay, Walmart Pay and Samsung Pay.
What do Consumers Look for with Digital Wallets?
While the big concern right now (during COVID-19 pandemic) is to slow the spread of germs by adopting contactless payments, there are many reasons why consumers are turning to digital wallets. People today want – and expect – fast, easy-to-use, safe and seamless payment experiences. They also enjoy using mobile wallets for the ability to make purchases in advance worry- and hassle-free.
In fact, according to a recent survey by McKinsey & Company, 70 percent of consumers strongly believe that mobile payments are going to be the norm. They also feel that they will become the favored form of payment for national and online merchants. Here are just a few of the reasons why industry experts are saying digital wallets are the future of payments:
- Consumers’ card info is a saved–and encrypted–to their mobile app, allowing them to avoid wasting time re-entering their card info for each purchase.
- Mobile wallets offer 24/7 fraud monitoring and reimbursement for any loss, fraud, or unauthorized transactions, thanks to zero-liability protection.
- Other security features with digital wallets include activity alerts, push notifications, transaction history, and personal account monitoring.
- Consumers can receive special offers, rewards and discounts through their digital wallet, and businesses can share news, promotions, announcements, product details and other valuable information.
As the current crisis continues, more and more merchants are having to jump on board with digital wallets to adapt and keep their business operating as smoothly as possible. Only time will tell just how many consumers continue to use their digital wallets over other payment options as the current crisis passes.
Author Bio: Blair Thomas has been a music producer, bouncer, screenwriter and for over a decade has been the proud Co-Founder of eMerchantBroker, the high risk credit card processing processor in the country. He has climbed in the Himalayas, survived a hurricane, and lived on a gold mine in the Yukon. He currently calls Thailand his home with a lifetime collection of his favorite books.