New data finds debit and credit card usage is down, along with cash usage, and digital wallets are ramping up in popularity when it comes to making purchases during the pandemic.
The Strawhecker Group (TSG), an analytics and consulting firm focused on the electronic payments industry, conducted a one-day poll of 483 consumers in April with the goal of understanding the impact Covid-19 has had on the way the U.S. consumer pays for goods and services. TSG found credit/debit card usage has declined 38 percent since the start of the pandemic.
And, while many feel contactless payments could slow the spread of germs, adoption is still low as 25 percent of respondents said they are not familiar with contactless payments. Another 7 percent feel contactless is too complex to use.
“Consumer education and merchant adoption are the primary hurdles for contactless payments in the United States,” said TSG in its report. “Until ubiquitous adoption of contactless terminals is achieved by merchant outlets, consumers will likely stick to what they know with dip/swipe.”
However, consumers ages 18-29 appear to have more awareness of contactless payments and exhibit higher usage of contactless payments than other demographics, said TSG. The survey also found 23 percent of respondents believe an adequate number of stores have contactless solutions and 42 percent believe not enough stores have contactless solutions.
Consumers Turning to Digital Wallets
Digital wallets are having a day, according to TSG. Forty-three percent of regular mobile/digital wallet users stated they have increased usage of mobile/digital wallets since the pandemic.
The most popular digital wallets include, in this order, Paypal, Venmo, Apple Pay, Google Pay, Cash App, Zelle, Amazon Pay, Walmart Pay and Samsung Pay
Not surprisingly, cash use has also declined during the Covid-19 pandemic.
“On average only about 52 percent of consumers surveyed regularly used cash before the pandemic. Since then, 42 percent of these respondents stated that they have decreased their use of cash, likely in an effort to minimize the spread of germs,” states the report.
In addition, a majority of consumers also stated that they do not plan to use cash regularly once restrictions have been lifted.