Rising prices give consumers pause

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Inflation continued to be a factor for shoppers in March, according to PYMNTS’ latest study of consumer spending and e-commerce trends.

The report, “Digital Economy Payments April 2022 US Edition How Consumers Pay in The Digital World,” also noted that the use of peer-to-peer (P2P) payments declined slightly, suggesting a decrease in discretionary spending, while as digital wallets continued to compete for a larger share of the payout mix.

Although the latest Census Balanced Survey of more than 3,000 US consumers found that spending was increasing as e-commerce made further gains, rising prices are clearly having a moderating effect on consumer spending habits. . Data from PYMNTS revealed, for example, that the share of consumers who shopped at the grocery store dropped by one percentage point to 88% and retail purchases fell by two percentage points to 60. % as prices rose across the board.

A positive sign is a gain in travel, purchased by 19% of consumers in March – a record since the monthly survey series began in December. Here we find the reverse of grocery and retail, with average travel spending in March of $363 lower than previous months.

Travel is also the only category where digital wallets are making inroads.

“Our data shows that 17% of all travel purchases were made using PayPal and other digital wallets,” the report notes. “By comparison, PayPal and other digital wallets were used in only 3.6% or less of all other retail purchases.”

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Get the study: Digital Economy Payments: How Consumers Pay in the Digital World April 2022

Run the Table card payments

With the exception of travel, e-wallets continue their ascent toward more widespread adoption, with card transactions still accounting for the lion’s share of purchases tracked by PYMNTS in March.

According to Digital Economy Payments April 2022, “42% of grocery sales were made by debit card, representing approximately $41 billion in sales. Only 6% of sales were made with digital wallets. While PayPal and other digital wallets have significant shares of sales made through online channels, a lack of in-store usage drags the average down.

The breakdown is illustrated by PayPal, used in 10% of online transactions but just over 3% of all grocery purchases, most of which are still made in physical stores.

The grocery store serves as an indicator for payment preferences in different contexts. Wallets are more popular for increasing e-commerce transactions.

The continued dominance of debit and credit payments raises fears of fraud, leading to a small but significant increase in card declines to 11% in March, up one percentage point in a month.

As the study notes, “37% of chargebacks occurred when a consumer used a debit card, and 33% occurred with a credit card. PayPal and other digital wallets were used in 13% of declined purchases, a relatively high share given their low usage. »

Card not present (CNP) fraud is prevalent in e-commerce. According to the latest data, 78% of consumers have been victims of card fraud online, compared to 22% in physical stores.

Figure 4

Get the study: Digital Economy Payments: How Consumers Pay in the Digital World April 2022

Disabled P2P Application Square

An overall increase in peer-to-peer (P2P) payments over the past few months tapered off in March — another one percentage point difference — from 32% in February to 31% in March.

This is likely the result of inflation reducing dining out and other opportunities for consumers to pay their way with a P2P app.

In March, the average P2P payment was $292, compared to an average of $211 in February.

Young consumers show a much higher preference for using P2P.

“P2P adoption was highest among young adults: 47% of millennials, 45% of bridge millennials, and 41% of Gen Z consumers made payments through a P2P platform,” according to the study. Of March. “Only 16% of baby boomers and seniors made payments through P2P platforms.”

Within this group of apps, Venmo took PayPal for the second consecutive month as the most used P2P platform, with Early Warning Services’ Zelle app taking third place.

Figure 5

Get the study: Digital Economy Payments: How Consumers Pay in the Digital World April 2022

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NEW PYMNTS DATA: THE FUTURE OF BUSINESS SUPPLIER INNOVATION STUDY – APRIL 2022

Plastiq - The Future Of Business Payables Innovation: How New B2B Payment Options Can Transform The SMB Back Office - April 2022 - Find out how all-in-one payment solutions can help businesses streamline B2B transactions and eliminate transaction friction. AP and AR management

On: While more than half of SMBs believe an all-in-one payment platform can save them time and improve cash flow visibility, 56% believe the solution could be difficult to integrate with AP systems and existing ARs. The Future Of Business Payables innovation report, a collaboration between PYMNTS and Plastiq, surveyed 500 SMBs with revenues between $500,000 and $100 million to explore how all-in-one solutions can exceed customer expectations. SMEs and help sustain their activities.

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