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Consumers keen on digital payments, TSYS study finds

April 5, 2018

Emerging payment options are gaining widespread acceptance with consumers across age groups, especially those in the 25–34 age demographic, according to the new TSYS U.S. Consumer Payment Study. 

But despite the rise of new payment methods, many consumers still want to pay for things the traditional way, with debit (44 percent), credit (33 percent) or cash (12 percent), according to the study.

The seventh annual study, tracked consumers' willingness to use artificial intelligence-powered personal assistants to make purchases; their acceptance of peer-to-peer payment options; and their rate of adoption for digital wallets.

Twenty-six percent of survey respondents said they own an AI device, such as an Amazon Echo or Google Home. Within this group, 60 percent said they would use the device to make purchases or payments, if available. That figure increases to 76 percent for consumers between ages 25 and 44.

Digital wallets are also experiencing a surge in popularity; 51 percent of respondents are interested in using a mobile wallet instead of a payment card when checking out at a store, up 11 percentage points from 2016, the study found.

Of consumers who have loaded a debit or credit card to a mobile wallet, 68 percent indicated that they expect to make 50 percent or more of their in-store purchases using a digital wallet within two years.

In addition, 29 percent of survey respondents said they have used a P2P payment service such as PayPal, Venmo or Zelle. Among those ages 25–34, the figure rises to 45 percent.

“Our latest study confirms that consumers are ready for change and adapting to the ever-evolving payments industry as new solutions are introduced,” Allen Pettis, TSYS executive vice president and chief customer officer for issuer solutions, said in the release. "Because of this, retailers and payments providers can continue reimagining the digital purchase experience for consumers.”

Other findings from the study:

• The top reason cited for not using a personal assistant for purchases and avoiding P2P payment options is security. Older Americans had the greatest concern with 45 percent of those 55 and older worried about security, compared with 29 percent of 18–24-year-olds.
• Consumer use of banking apps increased from 46 percent in 2015 to 63 percent in 2017. Users are most interested in being able to stop a transaction they did not authorize (80 percent) or instantly view transactions (72 percent).
• The number of consumers who have made In-store purchases with smart phones increased from 7 percent in 2015 to 12 percent in 2017.

Full findings from the study are available online.

TSYS conducted the study among 1,200 consumer panel members age 18 and older in October. All respondents had to have at least one credit and debit card to participate.