With the advent of smartphones, consumers have embraced the convenience of shopping from the palm of their hand, resulting in a significant transformation in their purchasing habits and preferences. This shift in consumer behavior is reshaping the payments landscape and paving the way for the growth of mobile wallets.
In the “Mobile Wallets Gain Ground” study, PYMNTS Intelligence draws on insights from a survey of nearly 2,600 U.S. consumers to examine consumer perspectives on their retail and grocery payments. The study also delves into their payment method preferences for purchases and the rationale behind their choices in various situations.
The study reveals a notable trend: consumers today have more purchasing options, significantly reducing in-person buying while boosting eCommerce sales by 50% since 2018. As a result, consumers no longer rely on traditional payment methods such as credit and debit cards, creating opportunities for the growth of mobile wallets.
For instance, digital wallets like Apple Pay and PayPal are steadily gaining popularity, propelled by their increasing acceptance in venues, shops, markets and service providers nationwide. The PYMNTS study indicates that this trend has the potential to significantly reshape the payments landscape in the foreseeable future.
The study also reveals that consumer behavior and preferences play a significant role in determining the payment methods they choose. When it comes to purchasing groceries, consumers tend to favor debit cards, regardless of whether they shop in-store or online. On the other hand, when purchasing non-grocery retail items, consumers lean toward credit cards. This preference for debit cards for groceries and credit cards for retail purchases remains consistent across different shopping channels.
Further data analysis reveals a growing trend in using mobile devices for shopping. Consumers are increasingly favoring mobile devices over desktops, laptops or voice-activated devices when purchasing groceries and other retail goods. Specifically, compared to December 2021, there’s been a nearly 50% jump in non-grocery retail purchases via mobile devices and a 35% surge in grocery purchases through the same platform.
Notably, the study reveals a generation gap in shopping habits. Older generations, such as baby boomers and seniors, still prefer using computers for purchases instead of mobile devices. In contrast, younger consumers are more likely to use their mobile devices for shopping. In fact, nearly 1 in 4 millennials and bridge millennials now shop for non-grocery retail items on their phones.
Going forward, the use of mobile wallets is expected to continue rising, driven by increasing merchant adoption and consumers’ growing appreciation of their advantages. For instance, the study highlights a significant surge in Apple Pay usage for both grocery and non-grocery retail purchases made on mobile devices. And while PayPal usage for grocery purchases on mobile has dipped, it remains steady for online retail transactions. These trends indicate that mobile wallets are gaining traction among consumers, offering convenience, accessibility, cost savings and enhanced security.
The rise of mobile wallets and the increasing use of mobile devices for shopping are reshaping the way consumers, especially younger demographics, make purchases. Although debit cards maintain their preference for groceries and credit cards for retail purchases, merchants can’t ignore the convenience and benefits that mobile wallets bring to the table when catering to these evolving consumer behaviors.