Marqeta, the global modern card issuing platform, has today released its 2022 State of Consumer Money Movement report looking at consumer payment, banking and shopping preferences, showing digital adoption is on the rise. The company surveyed of 4,000 consumers across three continents, including 1,000 UK respondents, showed that 61% of consumers feel confident enough with contactless payments to leave their wallet at home and just take their phone – a figure that rises to over three quarters (77%) for UK Gen Z respondents (i.e. those aged 18-24).
Marqeta’s research shows that contactless payments are becoming increasingly prevalent in the UK: 96% of UK consumers surveyed have used contactless in the last year. As a result, 42% of UK respondents say it’s been so long since they used anything except contactless, they can’t even remember their PIN anymore – a figure that rises to 54% of those aged under 24. 63% of respondents are so used contactless they don’t even know how to type a PIN.
COVID-19 has accelerated the shift to mobile and digital payments. The survey found that:
Almost half of UK consumers (46%) surveyed say they can count on their hands how many times they’ve used a bank branch in their lifetime. 50% of 18–24-year-olds say the idea of going into a physical bank is completely backward and alien to them.
Nearly two-thirds of respondents (63%) think cash will disappear entirely. However, 59% believe it will happen within the next five to ten decades. 33% of respondents believe that closing all bank branches tomorrow would have little impact on their daily lives.
Most people have a long-term relationship to their primary bank, despite the declining number of personal banking experiences. Six out of ten respondents were with their bank for at least six years. 38% remained loyal to their primary bank for more than a decade.
Consumers are open to the idea of cryptocurrency as a payment option. More than 25% (26%) of UK respondents now own crypto and 82% want to use it at point-of-sale like a debit card.
“The age of the bulky physical wallet might be moving behind into the rearview, confidence in mobile wallets is growing, and people feel increasingly comfortable that their mobile phone can handle their payment needs and not leave them stranded,” Anna Porra (European Strategy Director at Marqeta), commented. “While the shift to digital payments was born out of necessity, many are happy to completely step away from in-person banking. And it’s easy to see why – with long queues, inconvenient opening hours, and hygiene concerns particularly during the pandemic creating the perfect storm to shift consumer appetite away from in-person experiences that weren’t very popular to begin with. With physical branches closing at unprecedented rates, banks must ensure they adapt their products and services to operate online seamlessly.”
Research also shows that the payment preferences developed during the pandemic are now becoming habits. Consumers are increasingly reliant on mobile wallets: 77% of UK respondents have used a mobile wallet in the last 12 months, with 87% agreeing that they are easier to use than they imagined they’d be, and 83% saying they’re able to make purchases with their mobile wallet everywhere they want to. Nearly two-thirds of respondents (64%) say they prefer to use their mobile phones to pay for security reasons.
Customers are constantly looking for innovation in their banks, which is fueling the shift away from traditional in-person banking experiences. For example, four out of five consumers (80%) would prefer that their bank offer rewards that are personalized to them based upon their spend. 60% also want tailored advice from their bank about creating budgets. There is increasing appetite for invisible payments too, with 62% of respondents saying they can’t wait for more till-less stores to be rolled out more widely.
“While the pandemic was the catalyst for the shift to contactless and mobile wallets, it is the convenience, security, and speed of these payment options that have made them sticky,” continued Anna Porra. “As contactless limits continue to rise and more merchants welcoming contactless payments, banks and fintechs must work harder than ever to provide a smooth digital experience for their customers that provides them with security, giving consumers the digital convenience they crave.”