Table of Contents
Executive Summary
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- Market overview
- Key trends
- Cards and cash remain top of wallet…
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- Figure 1: Preference for cash/debit/credit, by generation, July 2019
- …while wallets are becoming increasingly digital
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- Figure 2: Mobile wallet adoption, by Age, July 2019
- But there is a great deal of variance in technological willingness, fear
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- Figure 3: Storing credit card behavior online, perception and behavior, July 2019
- And there will, according to most consumers, always be a need for cash
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- Figure 4: Attitudes toward cash, July 2019
- What it means and what’s next
The Market – What You Need to Know
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- Number and value of payments steadily increasing in every category but checks
- Retail industry keeps chugging along, ecommerce is chugging faster
- Consumer sentiment is high, but wounded
Market Size
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- Payments on the rise (except for checks)
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- Figure 5: Trends in noncash payments, by number, 2000-17
- Total cards payments grew by half a trillion dollars from 2016-17
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- Figure 6: Total card payments, 2016 and 2017
Market Factors
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- Consumer sentiment near all-time high, but takes historic stumble
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- Figure 7: Consumer Sentiment Index, January 2007-August 2019
- Retail industry continues to post gains
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- Figure 8: Total US retail sales and fan chart forecast, at current prices, 2013-23
- eCommerce growth outpaces total retail by 4:1, but comprises only 10% of total sales
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- Figure 9: eCommerce share of total US retail sales, at current prices, 2013-23
- Figure 10: Total US retail ecommerce sales and fan chart forecast, at current prices, 2013-23
Key Players – What You Need to Know
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- Mobile wallets are working, but brand loyalty might suffer
- Microlending has a macro future
- Contactless: here before, here again
What’s Working?
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- People are actually using mobile wallets (and why that isn’t always a good thing)
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- Figure 11: Mobile wallet adoption, by Age, July 2019
- Bentley bought with Bitcoin
- Cash App benefits from hip-hop collaboration
What’s Struggling?
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- Visa Checkout checks out; Chase Pay paid the piper
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- Figure 12: Visa Next, youtube video, April 2019
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- Figure 13: Chase Pay closure announcement, August 2019
- Payment indifference and concern for digital privacy are common
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- Figure 14: Storing credit card behavior online, perception and behavior, July 2019
- Card fees are driving New Yorkers irate
What to Watch?
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- Microlending: old concept, new arena
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- Figure 15: Attitudes toward cash, July 2019
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- Figure 16: Affirm & Walmart partnership, August 2019
- The Fed to build new system to speed up transfers
- Contactless: speeding up commutes and payments
- NY subway goes contactless
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- Figure 17: American Express, MTA partnership email, August 2019
- Chicago getting on board too
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- Figure 18: Ventra and Apple Pay in Chicago, August 2019
- Haven’t we seen this before?
The Consumer – What You Need to Know
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- Tried and true: consumers still prefer cards and currency
- After years of talk, people are finally using mobile wallets
- PayPal is an institution
- Credit is most popular online, especially on desktop
- Cash
Favorite Ways to Pay
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- Cards remain top of wallet
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- Figure 19: Preferred payment methods, ranked, July 2019
- Cash and debit favored by younger consumers, older prefer credit
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- Figure 20: Preference for cash/debit/credit, by generation, July 2019
- PayPal leads pack of other preferred payment methods
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- Figure 21: Other preferred payment methods, July 2019
Mobile Wallets
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- Mobile wallets are finally here!
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- Figure 22: Mobile wallet adoption, by Age, July 2019
- Mobile wallet popularity grew 40% year over year
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- Figure 23: Mobile wallet popularity, June 2018-July 2019
- What are the roadblocks to mobile wallet adoption?
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- Figure 24: Mobile wallet behaviors, July 2019
- What might move the needle even further for mobile wallets?
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- Figure 25: Motivation to adopt mobile wallet, July 2019
There’s an App for That: Digital Payment Methods
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- In a crowded field, PayPal stands apart
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- Figure 26: Payment systems used in past year, by race and ethnicity, July 2019
- P2P Battle: Venmo v Zelle v Cash App
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- Figure 27: Payment systems used in past year, by age, July 2019
- Racial and ethnic variations in payment app brand use
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- Figure 28: Payment systems used in past year, by race and ethnicity, July 2019
Preferred Payment by Type of Purchase
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- Cash losing its grip on in-store and personal payments
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- Figure 29: In-store payments, preferred method by age, July 2019
- Credit is the default for online shopping
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- Figure 30: Online payments, preferred methods for desktop vs mobile, July 2019
- Consumers prefer credit for large purchases, ACH for bills
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- Figure 31: Preferred payment methods for large purchases and bills, July 2019
Attitudes & Behaviors
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- Consumers may be afraid to store data online, but they’re doing it anyway
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- Figure 32: Storing credit card behavior online, perception and behavior, July 2019
- Most have a favorite card, but some rarely think about how they pay
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- Figure 33: Card favoritism versus card indifference, by generation, July 2019
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- Figure 34: Current homepage, August 2019
- Cash isn’t going anywhere soon
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- Figure 35: Attitudes toward cash, July 2019
- Cash use is highest among minority groups
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- Figure 36: Payment type behaviors – CHAID – Tree output, July 2019
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- Figure 37: Payment type behaviors – CHAID – Table output, July 2019
- Social media is now a payments arena…
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- Figure 38: Social payments and in-app purchase behavior, by age, July 2019
- And Facebook may help drive crypto awareness
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- Figure 39: Attitudes and behaviors toward cryptocurrency, by gender and age, July 2019
Appendix – Data Sources and Abbreviations
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- Data sources
- Fan chart forecast
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
Appendix – The Market
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- Figure 40: Number of non-cash payments, by type, select years 2000-17
- Figure 41: Credit card ownership, 18-24 year olds, trended data, 2010-2018
- Figure 42: Credit card ownership, 25-34 year olds, trended data, 2010-2018
- Figure 43: Credit card ownership, 35-44 year olds, trended data, 2010-2018
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- Figure 44: Credit card ownership, 45-54 year olds, trended data, 2010-2018
- Figure 45: Credit card ownership, 55-64 year olds, trended data, 2010-2018
- Figure 46: Credit card ownership, 65+ year olds, trended data, 2010-2018
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