October 29, 2014
Accenture Survey Shows 40 percent of North American Consumers Have Used Smartphones to Make a Merchant Payment, Up from 16 Percent in 2012
Eight percent of North American consumers use digital currencies at least weekly to make payments; usage is expected to increase by 10 percentage points by 2020
Cash transactions are expected to decrease by 12 percentage points by 2020
NEW YORK; October 29, 2014 – Forty percent of North American consumers have used their smartphones to make a payment at a merchant location, according to an Accenture (NYSE: ACN) survey of 4,000 consumers in the U.S. and Canada, up from 16 percent reported in a similar survey two years ago. Millennials and high-income consumers – household income of at least $150,000 – are the most avid adopters, with 52 percent of millennials and 55 percent of high-income consumers having used their phones as a mobile payment device.
“Digital payment technologies are maturing and we have seen more aggressive market entrants that are providing consumers with convenient and secure digital options for making payments,” said Matthew Friend, managing director and head of Accenture Payment Services in North America. “Our research shows that millennials are most likely of any age group to use a smartphone to make a mobile payment, and are in fact driving the adoption of new payments technologies.”
Of those consumers who have never used their mobile phone as a payment device in a merchant location (60 percent), the two most cited reasons preventing them from doing so were security concerns (57 percent) and privacy concerns (45 percent).
Digital currencies usage will increase driven by millennials and high-income consumers
The study found that eight percent of respondents use digital currencies to complete a payment transaction at least weekly, and 18 percent expect they will use digital currencies at least weekly by 2020. Digital currencies were defined as a form of currency or medium of exchange that is electronically created and stored. The primary reasons cited for embracing digital currencies is for protection of personal identity (46 percent) and lower transaction costs (43 percent).
Millennials and high-income consumers are expected to drive the use of digital currencies. Today, 13 percent of millennials and 19 percent of high-income respondents are using digital currencies to make a payment at least weekly, and 26 percent of millennials and 32 percent of high-income consumers expect to do so by 2020. Lack of information remains the number one reason why people today do not use digital currencies, with 38 percent of consumers not interested in using digital currencies saying they need more information before they will consider it.
“Our survey reveals that customers are increasingly embracing alternative forms of payment,” said Dave Edmondson, senior managing director and head of Accenture’s Banking practice in North America. “As payments technologies continue to evolve, financial institutions will need to upgrade their middle- and back-office legacy systems in order to support customer demand for faster, more real-time digital payments.”
Traditional payment forms are still dominant, but consumers anticipate usage decrease
The survey also indicates that by 2020 many traditional payment forms will decrease. Today, 66 percent of respondents said they make cash transactions, 59 percent use debit cards and 55 percent use credit cards at least weekly to make a payment. When asked how they anticipate using these payment instruments in 2020, the respondents indicated they would decrease usage of cash, debit cards and credit cards as payment instruments at least weekly by 12 percentage points, six percentage points and three percent points, respectively.
“By 2020, we anticipate the first decline in credit card usage in more than five decades and in debit card usage since they were introduced,” added Friend. “While millennials and higher income consumers are paving the way for increased mobile payments and the usage of digital currencies, we expect the other age groups to increasingly embrace these payment methods as more consumer friendly and secure solutions become available in addition to merchants adopting these technologies.”
Among other survey findings
Respondents who currently use their smartphones to make payments would do so more frequently, if they had the ability to:
- scan a product for purchase immediately (71 percent), eliminating the requirement for check out;
- use their phone to track receipts (69 percent);
- receive valued customer treatment, such as a separate line to speed up payment (67 percent);
- scan a product and learn more about it, such as customer reviews, comparable products or retailer price comparisons (66 percent).
Respondents who do not currently use their smartphones to make payments would consider doing so, if they were offered:
- rewards points (54 percent);
- discount pricing based on past usage (53 percent);
- payment device received and stored all receipts in a secure database and seamless tracked spending habits (52 percent).
Accenture designed and commissioned an online survey of consumers in the United States and Canada to identify current and future payment behaviors, which was conducted in August 2014. The 4,000 respondents included 3,400 from the United States and 600 from Canada, with an equal percentage of men and women.
Accenture is a global management consulting, technology services and outsourcing company, with more than 305,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$30.0 billion for the fiscal year ended Aug. 31, 2014. Its home page is www.accenture.com.
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