According to an Accenture report titled “Accenture 2016 North America Consumer Digital Payments Survey,” published Tuesday, 60 percent of consumers use cash on a weekly basis to make purchases at a merchant location, compared to 67 percent in 2015. Although digital payment is on the rise and 56 percent of consumers are aware of mobile pay, regular use remains static at 19 percent.
Despite the decline of cash as a payment method, cash and plastic continue to be the most common payment methods among consumers. Fifty-eight percent of those surveyed use debit cards as payment methods in merchant locations and 53 percent use credit cards to purchase items in stores. As cash and plastic remain the key payment methods, consumers remain hesitant about using mobile pay.
“We are seeing a gradual increase in consumer awareness of mobile phone payments options; however, adoption has remained flat over the past few years,” said Robert Flynn, managing director of Accenture Payments in North America. “To shift consumers’ payment behaviors will take more than just providing another ‘me too’ mobile payments option; leading merchants will identify and provide next-generation, value-added services.”
Mobile pay’s appeal may be down, but other digital payments are on the rise, which consumers expect with retail’s technology evolution over the next few years. Today, 18 percent of people use PayPal for transactions. Consumers are also optimistic about mobile wallet adaption and they expect a nearly 60 percent increase in card networks using mobile wallets by 2020.
“The existing payments system isn’t broken, which is why consumers are not making a mass-move to mobile phone payments adoption—the incentives are not there yet,” said Michael Abbott, managing director of Accenture’s digital financial services in North America. “Payments providers need to bring the traditional card to life and create a real-time interactive experience for consumers.”
Barriers also exist for mobile pay adoption. Sixty-four percent of consumers have never used their smartphones to pay for items in a merchant location and 37 percent said that they don’t need mobile pay, since they believed that cash and plastic were fine for payment methods. Additionally, nearly 20 percent of consumers prefer to not register payment information on their smartphones for security reasons.
Millennials and mass affluent individuals are the two shopper demographics that are the most interested in mobile pay. Thirty-percent of millennials and 35 percent of mass affluents (that is, the recently rich) are highly interested in paying for purchases with wearables and smart devices. Fifty-two percent of millennials and mass affluents also consider themselves to be the first groups to test new technologies.
“Millennials and higher income individuals may be low-hanging fruit for payments providers looking to increase adoption, but there is also a vast amount of untapped opportunity with consumers who are becoming more familiar with digital technologies and the rewards and convenience it affords,” Flynn said.
Although millennials and mass affluents are leading the mobile pay movement, the survey also found that many consumers are becoming more open to new digital payment options, including mobile pay. One-fifth of consumers are interested in using smart devices to pay for things, while 73 percent of consumers trusted traditional card providers as their mobile payments provider.