35% of consumers embrace cashless transactions through payment apps and mobile wallets

Anne Freer | August 14, 2023

App Business

Mobile wallets and payment apps are all the rage, especially since the pandemic forced many into going cashless. But one mobile payment app stands out as being the favourite among customers – whether shopping online or in-store. Let’s find out more.

The top payment apps are…

A growing number of Americans are now using mobile wallets for their shopping transactions, according to recent insights from CivicScience. Approximately 35% of participants utilise at least one e-wallet or mobile payment app with varying frequency for in-store purchases, while 44% report the same usage pattern for online transactions. So which app comes out on top?

PayPal stands out as the top choice among users of payment apps. Irrespective of whether transactions occur in physical stores or the digital realm, consumers prefer to use PayPal over Apple Pay, Venmo, and Google Wallet.

Notably, Apple Pay claims the second spot in the race, outperforming Google Wallet, and gains further traction for in-person transactions compared to online dealings.

Leading payment apps

Source: Civic Science

When it comes to in-store transactions, PayPal usage lags by seven percentage points, whereas Apple Pay gains a two-point advantage over its online counterpart. Despite its expanding influence, PayPal’s adoption as a recognised payment method in physical stores remains limited, thus underscoring the role of e-wallets in this context.

Security and convenience still major barriers

Just 14% of consumers frequently use mobile payment solutions. In contrast,  24% hold a steadfast aversion towards using them. The majority of Americans, however, fall somewhere in between – they either use mobile payments infrequently or are open to the idea but haven’t fully embraced it yet.

The reasons behind this cautious embrace of mobile payments are twofold. Firstly, those who use mobile payments sporadically or are hesitant about them commonly express concerns about the security of these apps. Interestingly, this worry about security is a top concern across generations, with those aged 55 years and above registering the highest degree of concern at 48%.

Main reasons for not using mobile payment apps

Source: Civic Science

The second major barrier is convenience. Many consumers believe that mobile wallets and payment apps don’t offer any greater convenience compared to traditional payment methods. To sway non-users, it’s crucial to demonstrate how e-wallets and mobile payment apps can genuinely offer more convenience than their current ways of paying for goods and services. This could potentially encourage a much larger group of people to give mobile payments a chance.

Who’s using payment apps and why?

The younger demographic, those under the age of 35, are the driving force behind the general population’s use of mobile payment apps. A notable 10% of Gen Z adults claim mobile payment apps as their primary choice, in contrast to a mere 1% among those aged 55 and above.

Those who prioritise mobile payment apps are also keen on exploring alternative financial tools. For instance, 16% of these mobile pay enthusiasts express their intention to give ‘buy now, pay later’ apps a shot in the near future, and an impressive 38% have already embraced this option.

Furthermore, individuals who hinge on mobile payment apps for their primary transactions hold a rosier perspective regarding their personal finances. They are more inclined to express optimism about their financial prospects, stating that their financial situation is likely to improve in the times ahead.

Nevertheless, mobile payment apps and e-wallets have yet to emerge as dominant forms of payment within the consumer landscape. Although Apple Pay setups and Venmo usage are commonplace, a mere 5% acknowledge mobile payments as their foremost payment method. While younger generations exhibit greater openness to alternative payment methods, there still exist entrenched perceptions that must be overcome before mobile payments can achieve more widespread acceptance.

Key takeaways

  •  35% use e-wallets for in-store, 44% for online purchases, signalling increasing digital payment adoption
  • PayPal is preferred over Apple Pay and Google Wallet, with Apple Pay excelling for in-person transactions
  • Just 14% use mobile payments often; 24% resist. Security and convenience concerns impact broader adoption

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