CivicScience data tracking shows that debit cards have been the most commonly used form of payment among U.S. consumers for years. It wasn’t until the push for contactless pay in 2020 that consumers began using debit cards slightly less. While debit cards still hold their place as the primary payment form among consumers, mobile pay and e-wallets have seen an increase, more than doubling between 2020 and 2021. However, the total number of consumers who primarily utilize mobile pay only totals to 5% of the adult U.S. population in 2023.
Mobile payment options are becoming increasingly available among U.S. vendors, but few U.S. adults rely on e-wallets or mobile payment apps as their main payment form. However, additional CivicScience data from July show that much higher numbers use them for at least some percentage of purchases – 35% of respondents use at least one e-wallet/mobile payment app for purchases in stores with any degree of frequency, while 44% say the same for online purchases.
The single most popular payment app – among people who use them – is PayPal. Whether making a purchase in a store or online, consumers are more likely to use PayPal year-over-year than Apple Pay, Venmo, Google Wallet, or others. Apple Pay is the second most popular payment app, leading over Google Wallet, and is used even more for in-person over online transactions. Compared to online transactions, in-store usage of PayPal is seven points lower while Apple Pay is two points higher. Although expanding, PayPal isn’t yet a widely accepted payment form in stores, which is where e-wallets come into play.
Security and Convenience Concerns Limit Greater Adoption
Recent findings show that just 14% of consumers report they use mobile payment solutions ‘often.’ On the other hand, nearly one-quarter (24%) are firmly opposed to using them (citing they would ‘never’ consider using a mobile payment solution). The majority of Americans remain somewhere in the middle – either infrequent users or those who don’t use mobile payment but may be considering it.
The answer to the question of why consumers aren’t using mobile payment solutions more regularly is two-fold. First and foremost, infrequent users and those who are on the fence about mobile payment solutions express concern over the security of mobile payment apps. Security is the number one concern within each generation as well, despite those aged 55 and older being the most concerned at 48%.
The second reason consumers say they don’t transact using mobile pay more often is related to convenience. Consumers feel these tools simply aren’t any more convenient than traditional payment methods. Proving to non-users that e-wallets and mobile payment apps are truly more convenient than how they currently pay for goods and services could lead to many more individuals using mobile pay.
People under 35 are less concerned about the security of mobile payment apps than older adults, but they are more concerned about the technology within the app failing to work. Potential users under 35 don’t need convincing of convenience and security as much as they need reassurance that the technology will work for them when they need it to.
Understanding Mobile Payment App Users
A few quick insights on people who primarily use mobile apps for purchases:
- As expected, people under 35 years of age are the driving force behind the Gen Pop’s use of mobile payment apps: 10% of Gen Z adults say they primarily use mobile payment apps compared with 1% of those 55 and older.
- Those who primarily use mobile payment are interested in alternative financial tools. For example, 16% of mobile payers say they intend to try ‘buy now, pay later’ apps in the near future, while 38% have already used them.
- People who use mobile payment apps as their primary payment form report a better outlook for their personal finances, as they’re more likely to say their financial situation will get better in the future.
Mobile payment apps and e-wallets have yet to hit their stride as major payment forms among consumers. While many consumers have set up Apple Pay or utilized Venmo, only 5% say mobile payments are their primary payment form. Younger generations are more open to alternative ways to pay, but there are still preconceived notions that need to be overcome before mobile payments can become more widespread.
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