Consumer Payment Preferences - US - September 2019

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
Market overview
Key trends
Cards and cash remain top of wallet…
Figure 1: Preference for cash/debit/credit, by generation, July 2019
…while wallets are becoming increasingly digital
Figure 2: Mobile wallet adoption, by Age, July 2019
But there is a great deal of variance in technological willingness, fear
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
Figure 4: Attitudes toward cash, July 2019
What it means and what’s next
THE MARKET – WHAT YOU NEED TO KNOW
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
Payments on the rise (except for checks)
Figure 5: Trends in noncash payments, by number, 2000-17
Total cards payments grew by half a trillion dollars from 2016-17
Figure 6: Total card payments, 2016 and 2017
MARKET FACTORS
Consumer sentiment near all-time high, but takes historic stumble
Figure 7: Consumer Sentiment Index, January 2007-August 2019
Retail industry continues to post gains
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
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 
Mobile wallets are working, but brand loyalty might suffer
Microlending has a macro future
Contactless: here before, here again
WHAT’S WORKING?
People are actually using mobile wallets (and why that isn’t always a good thing)
Figure 11: Mobile wallet adoption, by Age, July 2019
Bentley bought with Bitcoin
Cash App benefits from hip-hop collaboration
WHAT’S STRUGGLING?
Visa Checkout checks out; Chase Pay paid the piper
Figure 12: Visa Next, youtube video, April 2019
Figure 13: Chase Pay closure announcement, August 2019
Payment indifference and concern for digital privacy are common
Figure 14: Storing credit card behavior online, perception and behavior, July 2019
Card fees are driving New Yorkers irate
WHAT TO WATCH?
Microlending: old concept, new arena
Figure 15: Attitudes toward cash, July 2019
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
Figure 17: American Express, MTA partnership email, August 2019
Chicago getting on board too
Figure 18: Ventra and Apple Pay in Chicago, August 2019
Haven’t we seen this before?
THE CONSUMER – WHAT YOU NEED TO KNOW 
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
Cards remain top of wallet
Figure 19: Preferred payment methods, ranked, July 2019
Cash and debit favored by younger consumers, older prefer credit
Figure 20: Preference for cash/debit/credit, by generation, July 2019
PayPal leads pack of other preferred payment methods
Figure 21: Other preferred payment methods, July 2019
MOBILE WALLETS
Mobile wallets are finally here!
Figure 22: Mobile wallet adoption, by Age, July 2019
Mobile wallet popularity grew 40% year over year
Figure 23: Mobile wallet popularity, June 2018-July 2019
What are the roadblocks to mobile wallet adoption?
Figure 24: Mobile wallet behaviors, July 2019
What might move the needle even further for mobile wallets?
Figure 25: Motivation to adopt mobile wallet, July 2019
THERE’S AN APP FOR THAT: DIGITAL PAYMENT METHODS
In a crowded field, PayPal stands apart
Figure 26: Payment systems used in past year, by race and ethnicity, July 2019
P2P Battle: Venmo v Zelle v Cash App
Figure 27: Payment systems used in past year, by age, July 2019
Racial and ethnic variations in payment app brand use
Figure 28: Payment systems used in past year, by race and ethnicity, July 2019
PREFERRED PAYMENT BY TYPE OF PURCHASE
Cash losing its grip on in-store and personal payments
Figure 29: In-store payments, preferred method by age, July 2019
Credit is the default for online shopping
Figure 30: Online payments, preferred methods for desktop vs mobile, July 2019
Consumers prefer credit for large purchases, ACH for bills
Figure 31: Preferred payment methods for large purchases and bills, July 2019
ATTITUDES & BEHAVIORS
Consumers may be afraid to store data online, but they’re doing it anyway
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
Figure 33: Card favoritism versus card indifference, by generation, July 2019
Figure 34: Current homepage, August 2019
Cash isn’t going anywhere soon
Figure 35: Attitudes toward cash, July 2019
Cash use is highest among minority groups
Figure 36: Payment type behaviors – CHAID – Tree output, July 2019
Figure 37: Payment type behaviors – CHAID – Table output, July 2019
Social media is now a payments arena…
Figure 38: Social payments and in-app purchase behavior, by age, July 2019
And Facebook may help drive crypto awareness
Figure 39: Attitudes and behaviors toward cryptocurrency, by gender and age, July 2019
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Fan chart forecast
Consumer survey data
Direct marketing creative
Abbreviations and terms
Abbreviations
APPENDIX – THE MARKET
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
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