How many people are using digital payment platforms in 2022? CivicScience checked in on adoption of digital wallets, finding that roughly 60% of the population now uses some type of digital wallet (n=4,536 U.S. adults).
PayPal leads among digital payment platforms by a margin – more than one-third of adopters use it as their primary digital wallet service. That’s followed by Apple Pay, Venmo, and Google Pay, respectively.
PayPal has cornered the digital payment market. Even though some may not use PayPal as their primary digital wallet, all in all, a whopping 46% of the population uses PayPal to make transactions online. The top reasons? More than two-thirds of users cite convenience and security as their primary motive for using the service, with convenience being the most cited. Slightly more than one-in-ten users list PayPal Credit as the main advantage.
Ecommerce and Digital Payments
PayPal may dominate, but it’s not the go-to form of payment for online shopping. Looking at how frequently people use digital wallets for purchases, the majority of online shoppers still prefer to make most of their purchases by directly inputting credit card, debit card, or bank account information.
Just 20% of online shoppers make the majority of their online purchases using a digital wallet, with 8% relying on it exclusively for most or all purchases.
A small percentage (13%) use both digital wallets and cards/bank accounts equally.
Cash Isn’t Dead, Yet
When looking at transactions overall (not just online transactions), mobile payments are far less used and only account for 5% of usage as the main form of payment among survey respondents. Not all vendors or stores accept payment with digital wallets. Most Americans continue to rely on debit and credit cards for transactions, with close to three-quarters (73%) using them most frequently to make purchases. Cash is still used by more than 15% of respondents as the main form of payment.
Breaking the data down by age yields interesting results. Gen Z and Millennials are both the most likely to frequently use mobile payments for purchases – in fact, they are twice as likely as Gen X and six times more likely than Baby Boomers, of whom more than 84% use credit or debit cards for most purchases. However, younger adults are also the most likely to use cash and the least likely to directly use debit or credit cards for purchases. Gen Z in particular is embracing alternatives to plastic, including writing checks.
Fintech’s Future Outlook
Adoption of digital wallets is poised to continue growing, as industry leaders explore even more advanced solutions (such as Walmart’s new financial “super app”).
Currently, two-thirds of the Gen Pop expect mobile payment apps to become widely adopted over the next few years. The percentage of those who think they will become “common” has risen consistently year-over-year.
But cash is likely to stick around for a while. A growing number of people are against the idea of a cashless society. Just 6% fully support the idea, while more than 60% stand opposed to it.
Taking things one step further, just 7% of people are likewise enthusiastic about the future possibility of trading in their physical wallet for their smartphone, even if they could use it to carry out most transactions and store ID. More than half of respondents feel negatively about a smartphone-reliant future and would likely hold onto their wallets and cash, even if given the option.
Trust in Fintech
The slow adoption of digital payment solutions is likely rooted in distrust in their security. Banks as a whole remain far more trusted than digital wallets. Just a fragment of the population trusts digital solutions over traditional banks and financial institutions.
From fintech to cash, the payment landscape in 2022 is more diverse – and extreme – than ever before. The majority of Americans have warmed up to fintech in the form of digital wallets. As the data suggest, that can largely be attributed to PayPal’s market penetration, solidifying its lead as the number one digital payment solution. Yet just a small percentage of people use digital wallets frequently for purchases, which points to both lagging trust in digital solutions and availability at point-of-sale.