Product managers: These are the most useful U.S. consumer payments preferences
When it comes to payments, American consumers are becoming more sophisticated than ever. For product managers designing products to meet and exceed consumer preferences, the latest consumer preferences are useful inputs into the planning process.
After surveying consumers for the past seven years, the TSYS U.S. Consumer Payment Study has become the essential go-to guide for consumer preferences. The latest study, released in May, shows consumers in the midst of a massive shift towards mobile payments.
Granted, these preferences shift as rapidly as new technology emerges. As of this latest research, the following are the most useful consumer payments preferences for product managers designing products for American users.
Consumers shifting to mobile wallets
Mobile payments via digital wallets (such as Apple Pay) are on the rise – especially among younger demographics.
Among those already using mobile wallets, or those with plans to use digital wallets, the expectation is that most transactions will soon be completed via digital wallet.
Per the report:
“51% of survey respondents prefer to use a mobile wallet when checking out, rather than payment card. And 68 percent of consumers…indicated that within two years they will make 50 percent or more of their in-store purchases using a digital wallet.”
When it comes to familiarity with making in-app payments using mobile wallets, awareness is high. Users increasingly expect the ability to make payments seamlessly within apps on mobile devices.
As far as payment types, credit card payments maintain pole position. In fact, the percentage of consumers that prefer to pay with credit cards for online shopping grew five percent to 48% in 2017. For online travel sites, the jump was even larger: in 2015, 36% of users preferred to pay with credit card. In 2017, that number was 47%.
The rise of the mobile wallet is a boon for loyalty
The ease of using mobile wallets is also likely to make consumers more willing to use loyalty programs. This is especially true when you account for how easily points can be redeemed during checkout in the digital channel.
Already, 75% of consumers have credit cards with rewards. So, if consumers can redeem points seamlessly, brands can expect increased participation with targeted loyalty programs. The ability to earn points can also be used as a marketing tool to boost enrollment and guide user behavior when it comes to payments.
Consumers are open to personalized cross-promotions
When the consumer is in buying mode, they’re more likely to consider a cross promotion if it’s personalized – especially if the offer is from the same company. In order to be effective, these offers must be targeted and relevant to the user.
Product managers should work to place relevant, personalized offers within the booking flow. Not only can this increase average cart size, but can also increase customer satisfaction. Customers are happier when they feel like a brand understands them by delivering what they’re looking for.
Integrating peer-to-peer payments is important – sometimes
For younger consumers, the ability to pay others via third-party services, such as Venmo, is growing in importance. This is especially true for low-dollar purchases that young consumers might feel comfortable front for a group, such as a pizza delivery.
The hassle of integrating so many disparate services can be avoided by leveraging a technology partner’s expertise. This ensures that as many of your potential users as possible can split payments and pay how they prefer.
No one shops with voice – yet
The TSYS report has a positive outlook on voice purchasing. It found that 60% of respondents have used smart speakers to make purchases or payments, with 47% of respondents claiming to use their speakers “to shop/purchase items.”
Further, a majority across most demographics would be interested in using voice to make purchases.
However, this result might be a case of respondents not accurately reporting their actual behavior.
A recent inside scoop from tech site The Information found that only 2% of Alexa users have used voice to shop, and a whopping 90% of those who do try voice shopping do not try it again!
This internal Amazon figure shows how far voice shopping must come before it becomes a payment preference for U.S. consumers. They may say they want it, but they don’t actually use it.
For product managers, be wary of investing resources in voice. If the idea is to facilitate purchasing behavior, consumers may not be ready. Instead, focus on voice as a tool to explore existing orders or other informational uses.
The overarching take away from this report is to provide a diverse set of payment options for your consumers. Products that achieve this will be future proof, and have happier customers.
You can dive into the extensive TSYS report here.
For a full ROI calculation of integrating group payments into your user experience, contact us today.