Monday, August 31st, 2020
Pre-pandemic, the preferred payment alternatives among US customers were somewhat predictable.
According to the Fed Reserve Bank of Atlanta, the most noticeable trends from 2018 to 2019 were a surge in online bill payments and a persistent drop in cash payments.
Based on a countrywide representative survey poll of almost 3,400 clients, the average monthly payment volume per consumer was 68.5 in 2019.
The Fed’s study dabbed Survey of Consumer Payment Choice also found debit cards still the most widespread payment avenue, a position they have dominated from 2010.
In a month, shoppers made 24 debit card transactions for 35 percent of all per-month payments.
In the meantime, shoppers used credit cards 17 times for 24 percent of all transactions. Per-month cash spending reached 15 payments for 22 percent of all payments.
According to the Fed Reserve of Atlanta, credit cards outshined cash in 2019 for the first time.
Check payments also performed remarkably well with shoppers initiating an average of 3 transactions monthly in 2019 for 4 percent of all payments. Customers made eight transactions via the ACH network for 12% of per-month payments.
On the whole, there was a slight change in the choices of payment avenues in 2019 put side by side with Atlanta Fed’s findings in 2018. The researcher also found no notable changes in the count of consumers who purchased items or services over the web, or those paid via mobile.
Statistically, the only notable fluctuations were a 2 percentage point dip in the share of cash and a slight, 0.5 percentage point uptick in payments made through the online-banking bill.
“Payment choices are a habit and like lots of behavior, slow to change,” said Claire Greene, of Atlanta Fed Reserve. “Our findings show only a slight change from 2019 to 2020. So the result is not a surprise.”
The concern now, however, is whether shopper payment choices will resume the situation pre-pandemic once Coronavirus fades away.
Stay-indoor regulations have led to more online customer orders, increased adoption of contactless payments, and more web-based food orders.
“So much is happening,” says Greene. “It’s too early to predict, more so, considering that many factors affect payment choices.”
Greene sites factors like employment and income, shopping preferences, preferred payment avenue, verification methods like mobile, card tapping, or app-payments.
“As we speak, there’s a strong push to the current changes in payment habits. In the future, priorities may change from health-safe alternatives to other factors like cost, availability of preferred method, return to pre-pandemic lifestyle, etc. Contrariwise, many consumers are learning new methods in their daily endeavors, and some of those newfangled trends will suffice for some people.