What you need to know

Mobile payments are significantly affected by two separate industries – financial services and telecom. As the current economy wreaks havoc on US adults’ access to credit, smartphone purchases are expected to be delayed due to the COVID-19 pandemic and resulting recession. Older adults are still reluctant to embrace mobile payments, preferring to use the credit and debit cards with which they’re familiar. Younger generations, however, are already integrating their mobile devices into nearly every aspect of their social and financial lives, so mobile payments clearly have a bright future ahead.

Key issues covered in this Report

  • The impact of COVID-19 on consumer behavior and the mobile payments market

  • Effects of a US recession on smartphone purchases and mobile payment usage

  • Factors in converting non-users to adopt mobile payments

  • Highlights of consumers’ preferred mobile payment apps

Definition

For the purposes of this Report, Mintel defines “mobile payments” as the following:

  • Payments made on a smartphone web browser,

  • Payments made through a mobile wallet,

  • Contactless payments (purchases made with an NFC chip credit card), and

  • In-app purchases.

COVID-19: Market context

This update was prepared in November 2020.

The first COVID-19 case was confirmed in the US in January 2020. On March 11, the World Health Organization declared COVID-19 a global health pandemic, and on March 13, President Trump declared a national emergency in the US.

Across the US, state-level stay-at-home orders rolled out throughout the months of March and April, and nonessential businesses and school districts across the nation closed or shifted to remote operations. At the time of writing, all 50 states have seen significant resurgence of COVID-19 and are re-evaluating relaxed restrictions, allowing businesses to operate with varying levels of social distancing measures in place.

Economic and other assumptions

The analysis provided reflects an estimated range of the market’s prospects in light of the upheaval caused by the COVID-19 crisis. This forecast is driven by Mintel analysts’ understanding of consumer behavior in this market, alongside an evaluation of how exposed this sector is to the crisis and how quickly demand will return to previous levels once a degree of normality returns to the market. Mintel’s economic assumptions are based on the updated forecasts released by the CBO on July 2, 2020. The CBO expects US GDP to fall by 5.8% in 2020 and recover to 4.0% growth in 2021. The CBO projects the unemployment rate to average 10.6% for the year, with an 8.4% rate for 2021. The current uncertainty means there is wide variation in the forecasts.

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