It’s no secret. Businesses live or die based on adaptability.
Those adept at anticipating and preparing for change can unlock huge new opportunities. And those that don’t move with the times will inevitably get left behind.
In payments, anticipating new trends can be especially challenging. Not only is the market being continually disrupted, but customer behaviours and expectations are also evolving at a rapid rate.
Against this backdrop, Paysafe commissioned an independent research study to investigate buying habits, attitudes to cash and preferred payment methods in the UK, US and Canada. The study’s aim is simple: getting to the bottom of what’s really going on in payments and discovering which trends will continue to drive business growth.
Here’s what we found out.
More customers are transacting digitally than ever before – a trend that’s expected to continue in the coming years.
This is partly because customers value choice and convenience more than ever. However, it’s also because mobile shopping is becoming mainstream. Asked whether they feel confident about using their mobile phone to shop, 36% of respondents agreed and another 26% strongly agreed.
But this shift in consumer attitudes hasn’t just influenced the way people prefer to pay. It has also affected their buyer’s journey.
The emergence of dual-browsing
Customers in brick-and-mortar stores now increasingly look for better deals on their phone, even as they scan the aisles.
The main consequence of this trend is that customers have become more price-conscious and, therefore, more fickle. They have no qualms about walking out the front door without completing a purchase if they find a better deal online.
This means businesses need to shift away from the traditional concept of the store as a mere outlet. Far from being purely transactional, the physical stores of tomorrow are spaces where the customer is nurtured and offered an immersive, more personal brand experience.
Customers remain just as fickle online as they’ve become offline. On average, they abandon a shopping cart twice in any given month.
Respondents gave various reasons for this, ranging from technical issues (the website was too slow or didn’t work well on mobile) to logistical issues, such as inconvenient delivery times. However, the most common reason given by was hidden fees and charges. Four in ten of the respondents said they didn’t follow through with a purchase because of these fees and charges, highlighting the continued importance of transparency in driving competitive advantage.
Many customers find hidden fees confusing and annoying enough to abandon transactions even at an advanced stage. More importantly, they seem to do so across the board, regardless of their age or the region where they live.
Traditional cash is losing popularity across markets. In general, most respondents reported carrying less of it than they did a year ago. And many expect they’ll need to carry even less — if any at all — in two years’ time. For many Americans, notes and coins remain a preferred method of payment.
Somewhat predictably, cash is least popular with those under 34. As this cohort grows older and gains more spending power, it stands to reason that the popularity of traditional cash will continue to decline in favour of alternative payment methods.
Mobile wallets are emerging as the most popular cash alternative, especially amongst younger generations. 86% of 18-25 year olds and 89% of 26-34 year olds expect they’ll be using them more in the next 2 years.
However, the path towards alternative payments isn’t necessarily clear cut.
A sizeable chunk of people still report having security concerns, both when it comes to contactless and mobile payments. Whilst innovations such as cryptocurrencies and biometrics are taken up enthusiastically by a hard core of early adopters, this is hardly close to becoming mainstream.
As consumers get more comfortable with new innovations, they’ll surely feel encouraged to try them out. That said, most expect to pay using the method they prefer right now. For this reason, merchants need to offer a wide range of payment options — including cash alternatives — if they’re to stay relevant and accessible to as wide a customer base as possible.
Looking for more in-depth insights and statistics on shifting consumer attitudes to payments.