Consumers Say Cash and Plastic are Fine for their
Payments Needs
TORONTO, Oct. 18, 2016 /CNW/ - Sixty-three percent of
consumers in Canada use cash at
least weekly to make purchases at a merchant location, down five
percentage points from 2015 – the most significant decline in use
of traditional payment methods over the past year, according to a
new report from Accenture (NYSE: ACN).
Awareness of mobile phone payments increased nine percentage
points from last year to 49 percent, slightly lower than the
overall North American response of 56 percent, while the regular
use of mobile payments in Canada
remains flat at 11 percent, compared with 19 percent overall for
North America.
The 2016 North America Consumer Digital Payments Survey is based
on responses from more than 4,000 smartphone users in the United States and Canada, and is the most recent report in
Accenture's multi-year research on consumer attitudes about how
they want to pay now and in the future. The survey found that even
with the decline in cash use, cash and plastic continue to be the
most commonly used payment methods. Canadian consumers' use of
debit and credit cards for payments in merchant locations dropped
one percentage point each to 57 percent in 2016.
"We are seeing a gradual increase in consumer awareness of
mobile phone payment options; however, adoption has remained flat
over the past few years," said Jonathan
Magder, Canadian Payments Lead for Accenture. "Consumers are
content to use cash and plastic for their everyday transactions,
and while the use of cash is declining overall, it is the most
commonly used form of payment. To shift consumers' payment
behaviors will take more than just providing another 'me too'
mobile payments option; leading merchants will identify and provide
next-generation, value-added services."
While the use of mobile phone payments at merchant locations
remains flat, according to the survey, other digital payments are
on the rise – a trend that consumers expect to continue. Since
2015, Canadian consumers' use of PayPal has increased eight
percentage points to 18 percent in 2016. Consumers expressed
optimism about mobile wallet adoption in the future, expecting a 67
percent increase in the use of mobile wallets by card networks
(from 12 percent in 2016 to 20 percent in 2020) and tech giants
(from seven percent to 15 percent in 2020).
"The existing payments system isn't broken, which is why
consumers are not making a mass-move to mobile phone payments
adoption – the incentives are not there yet," said Magder.
"Canadian consumers expect more in today's fast-paced digital
environment; just the ability to tap-and-pay is not enough.
Payments providers need to bring the traditional card to life and
create a real-time interactive experience for consumers."
The survey identified barriers to consumer adoption of mobile
payments, which, if addressed, can provide first-movers with a
significant advantage. Of the nearly two-thirds (64 percent) of
North American consumers who have never used their mobile phone as
a payment vehicle at a merchant location, more than one-third (37
percent) said they have not done so because they believe cash and
plastic are fine for their payments needs, while nearly one-in-five
prefer not to register payments credentials into their mobile phone
(21 percent) or are concerned that unauthorized transactions may
happen (19 percent).
Consumers trust traditional payments providers the most and are
largely satisfied with digital payments transactions; however,
there are no clear winners yet. Nearly three-quarters (71 percent)
of Canadian consumers said they trust traditional card providers
the most as their mobile payments provider, followed by alternative
payments providers like PayPal (62 percent), established retail
banks (58 percent) and large tech companies (54 percent).
Millennials and Mass Affluents: the Path to
Adoption
Millennials, and mass affluent individuals who earn
$100,000 annually after taxes, are
natural segments for payments providers to target, as they lead
adoption trends in digital and mobile payments and self-proclaimed
early adopters for the next wave of payments technology. About half
of both groups (47 percent for mass affluent and 48 percent of
millennials) consider themselves to be among the first to try new
technologies. About one-fifth of millennials (19 percent) and mass
affluents (22 percent) are extremely interested in initiating
payments transactions using wearables (e.g. watch, etc.) or smart
devices, such as a refrigerator or car.
Magder concluded, "Millennials and higher income individuals may
be low-hanging fruit for payments providers looking to increase
adoption, but there is also a vast amount of untapped opportunity
with consumers who are becoming more familiar with digital
technologies and the rewards and convenience it affords. As open
banking becomes more prevalent, driven by APIs, consolidated
customer data will provide a full picture of the customer,
providing payments providers with the information they need to
create unique and differentiated offerings. Winning in mobile
payments is anyone's game at this point."
While millennial and mass affluent consumers are leading the
adoption charge, the survey found that consumers overall are
becoming more open to considering digital payments options.
One-fifth of North American consumers are interested in using
wearables (21 percent) or smart devices (20 percent) to initiate
payments, a two and three percentage point increase respectively
from 2015. North American consumers expressed the most interest in
the ability to park their car and have the car automatically pay
for parking (30 percent).Today, nearly one-fifth of consumers (21
percent) are extremely comfortable linking personal data with
different ways to pay for faster authentication and one-step
checkout, and nearly two-fifths are comfortable providing online
bank account credentials to third-parties.
Methodology
The survey was conducted by Accenture
Research among 3398 adults in the United
States and 602 adults in Canada between July 6,
2016 and July 22, 2016. The
overall margin of error is +/- 1.55 percentage points at the
midpoint of the 95 percent confidence level.
About Accenture
Accenture is a leading global
professional services company, providing a broad range of services
and solutions in strategy, consulting, digital, technology and
operations. Combining unmatched experience and specialized skills
across more than 40 industries and all business functions –
underpinned by the world's largest delivery network – Accenture
works at the intersection of business and technology to help
clients improve their performance and create sustainable value for
their stakeholders. With approximately 384,000 people serving
clients in more than 120 countries, Accenture drives innovation to
improve the way the world works and lives. Visit us at
www.accenture.com.
SOURCE Accenture