We are seeing fierce competition among payment companies to be top of wallet.
Which brands are winning and what do consumers see in the future? In our Koski Research Future of Money Study we see digital payments moving to the top of the wallet overall. 25% of Americans predict that they will prefer to use digital payment apps over debit and credit cards as their number one payment method 5 years from now. And, we see competition among brands on who will be the lead digital payments provider.
Payment Apps in Wallet Share
In our Future of Money Study we asked Americans to rank payment preferences for both in-person and online payments for current preferences and predicted preferences 5 years from now. Traditional methods – debit (39%), cash (34%), even credit cards (21%) dominated in-person payments. But when we look to the future, a different story unfolds. Americans predict a jump in payment apps (8% to 25%).
PayPal, credit cards, and debit cards take the lead for current online payments. The future looks similar but Americans foresee a crowded marketplace. This marketplace even includes options like cryptocurrencies (7%) and those yet to be invented (7%). While PayPal appears to hold steady (35% to 32%), Americans predict other payment methods will take space in their wallets.
Digital Payment App Awareness & Usage
PayPal leads for both awareness (99%) and usage (44%) in the payment app space. Apple Pay and Google Pay are currently in line among others for second place, though they have some ground to cover to catch up with PayPal. Five years ago we asked consumers to predict the leader of payment technology and 14% of the U.S. General Population predicted PayPal would be the leader. Apple (11%), Visa (10%), and Google (10%) were close behind in predictions. PayPal has exceeded consumer expectations.
Digital payment app awareness is high among Americans — consumers know they have options. The big push for digital payment companies is to increase engagement and usage. While PayPal is the exception, other brands need to close the gap between awareness and usage. PayPal will face a fight to keep their share. Two years from now digital payment transactions are predicted to rise to $726 billion. Who will have the most share?
Future of Digital Payments
The digital payment landscape is changing quickly, both online and in-person. Competition is likely to come from big players and also from consumers’ desire to have the easiest and secure way to spend and track payments. Americans anticipate a rise in cryptocurrencies and solomething that hasn’t even been invented yet. What needs and expectations do your customers have during the digitally evolving financial world?