Whether using PayPal for online purchases, sending money to friends through Venmo, or paying for your coffee with Apple Pay, most people have at least heard of one of these types of digital payment apps by now.
New research from CivicScience reveals that the prevalence of digital payment apps in the U.S. is growing.
A recent online poll from CivicScience tracking more than 63,600 U.S. adults shows significant and steady growth in mobile payment app usage since 2018, coinciding with falling numbers of those who have never used the apps.
In September 2018, 32% of adults used and liked mobile payment apps; today, that number has grown to nearly 40%. The data also shows that the number of people who use and like the apps now leads over those who have never used them and aren’t interested in doing so — representing the first time that shift has occurred since tracking began in 2015.
Just about 10% of the surveyed population has used the apps but didn’t like them. Only 5% have never heard of the apps.
Naturally, that aligns with an overall increase in using mobile devices to make purchases, whether daily, weekly, or monthly, as shown below:
Using mobile payment apps also goes hand-in-hand with mobile banking, the study shows. The app users are three times as likely to use a mobile device for retail (consumer) banking, such as paying bills or transferring funds, compared to those who don’t use mobile payment apps.
In fact, a large majority (80%) of mobile payment app users are doing their retail banking on a phone or tablet at some point, with one-third primarily using a device.
The question is, are we witnessing a paradigm shift in how people pay for goods and services or send money?
Consider that many digital payment methods are also widely accessible via a computer or tablet, such as PayPal and Venmo. The number of people using these “digital wallets” for purchases and money transfer may be greater than 40%.
Yet the focus of the study is on the adoption of the apps on mobile devices. Even though early adopters have jumped on mobile trends for payment and banking, it’s important to note that despite their growth, mobile payment apps are certainly not the primary way that Americans are paying for things, unlike some areas in China.
A past CivicScience study found that security concerns top the list of reasons why adoption as a primary payment form in the U.S. is so slow. In fact, the majority of Americans are not in favor of a cashless society, as recent data shows.
Still, mobile payment apps are gaining not just usage traction, but also popularity in terms of how people foresee the future. The study found that public expectations for app usage are rising alongside actual usage. While 40% of survey takers currently use payment apps, a higher percentage (60%) anticipate that mobile payment apps will become widespread.
Since 2018 alone, the number of people who expected the apps to remain “niche” has fallen by 5 percentage points (blue line).
Who is leading the way towards greater adoption? App-savvy young adults, of course. It’s not surprising to see that young adults rank as the biggest mobile payment app users, with about half of 18-34-year-olds using and liking the apps. However, 35-44-year-olds follow close behind, and usage tapers off as age increases.
Even with growing usage and high adoption among young adults, it’s unlikely mobile payment apps will become the main method of payment in the U.S. any time soon. But it is safe to say as mobile payment apps gain broader acceptance, alongside using mobile devices for things like purchasing and banking, they are becoming increasingly important to the economy.