Stay-at-home guidelines throughout the COVID-19 pandemic have certainly sped up the rate of not just e-commerce adoption but mobile shopping, with 38 percent of online retail payments made through mobile devices, according to a DaVinci Payments study. But a large subset of consumers is using it for most of their online purchases—in fact, 57 percent of shoppers use mobile for more than 50 percent of their e-commerce shopping. Shoppers between the ages of 26 and 38 lead the way here, with 75 percent using mobile for more than half of purchases.
There’s even a sliver—16 percent—of shoppers who use mobile for 100 percent of their online purchases, according to the report published Tuesday. While that’s not a massive number yet, the percentage jumps to 27 percent of 26-to-30-year-old shoppers, showing that the younger audiences are becoming more comfortable with mobile payments on the whole as new options gain traction.
“An overwhelming majority of people are connected, with 95 percent of survey respondents having connected devices and 85 percent having apps on their phones that can make payments,” said David Josephs, CEO of DaVinci Payments. “This supports the spike in online shopping and mobile payments driven by COVID-19 and is occurring across all ages. Traditional payment methods like credit, debit and prepaid cards are as popular as ever, but swiping physical cards themselves is giving way to new form factors like mobile wallets, apps and contactless payments.”
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In total, 57 percent of shoppers have up to three payments apps downloaded on their connected devices, while 22 percent have between four and six apps, the Future of Payments Study said. Shoppers earning between $100,000 and $199,999 per year are the most likely to have between four and six apps.
Despite the prevalence of these payments apps, shoppers simply prefer using a credit card first as their primary way to transact online. The top credit card users are shoppers aged 56+ and 31 to 38, with this payment option skewing more toward men. The debit card takes second place, but are preferred most with the 18-to-25 demographic and are used more by women.
Payment apps and mobile wallets come in third and fourth, respectively. Payment apps are most-preferred among the 31-to-38 demographic, with the 26-to-30 age range coming in a close second, which aligns with the survey’s indication that these consumers are the most likely to have more than four payments apps installed on their phones.
The majority (55 percent) of consumers aged 31 to 55 have one or two “connected” devices, which consist of mobile devices, tablets or wearables. Thirty-five percent of shoppers aged 31 to 38 use three or four connected devices, while 33 percent of those that are 39 to 55 use this many.
Interestingly enough, the more money shoppers earn, the greater their use of new payment technologies. While the majority of shoppers make five mobile payments via app per month, 46 percent of those who earn between $100,000 and $199,999 per year make more than 10 payments through mobile apps per month.
Although consumers are steadily adopting more payments technologies, cash is still king when it comes to the in-person transaction. Cash remains the No. 1 preferred option to pay in person among the 1,049 U.S. shoppers surveyed despite the changes in shopping habits since the coronavirus pandemic began. Cash runs the gamut generationally as well, as it is the most preferred by the youngest (18 to 25) and oldest (65+) shoppers surveyed.
The next three most-preferred payments options are surprisingly traditional: debit card, credit card and check. This is despite the continued growth of mobile payments and mobile wallet platforms, as well as installment payments platforms as more consumers shun credit cards.
Contactless payment comes in as the fifth-highest preference among available in-person paying options, which is another surprise given the hesitance many shoppers have about interacting with another person in a store setting. According to a study from Mastercard of 17,000 consumers across 19 countries when the pandemic had forced most stores throughout the world to close, 79 percent of global shoppers say they are now using contactless “tap to pay” payments, citing safety and cleanliness as key drivers.
That Mastercard study pointed out that 46 percent had swapped out their preferred “top-of-wallet” card for one that offers contactless―and this proportion climbs to 52 percent among those under 35 years old. On a similar note, the DaVinci study said contactless is preferred the most by shoppers aged between 26 and 38.
With 36 percent of retail sales now occurring online, thanks to changing customer behavior amid the pandemic, that number is 2.2 times higher than last year’s total of 16 percent. The percentage is only going to expand once the holiday season kicks in—as much as 43 percent of all shopping is expected to take place online during the peak season.
And a growing number of consumers now actually spend more than half of their shopping dollars digitally, and that will only increase as the holiday season gets closer. While 65 percent currently spend more than 50 percent of sales online, that total may jump to as high as 71 percent come November. Shoppers aged 26 to 38 are leading this charge, with 82 percent looking to spend more than half online by the end of the year.