Consumer Payment Trends in the U.S.
 

Consumer Payment Trends in the U.S.

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Consumer Payment Trends in the U.S. Consumer Payment Trends in the U.S. Document Transcript

  •    Get more info on this report!Consumer Payment Trends in the U.S.April 1, 2010Businesses routinely seek to appeal to consumers by understanding which goods orservices they want to buy. But understanding how shoppers prefer to buy—that is,which forms of payments they favor, and why—is also critically important. Marketers,retailers, card associations and other product and service providers hope to maketransactions easy and convenient for consumers, but they must also balance theserequirements against their own needs. Meanwhile, in the post-recession U.S.marketplace the world of payments keeps evolving as consumers back away from creditcards, debit cards move toward saturation, online payment options proliferate, andcontactless payments and mobile payments move closer on the horizon.This all-new report from Packaged Facts examines consumer payment forms of allkinds, including credit cards, debit cards, gift/prepaid cards, cash, checks, onlinepayment and emerging forms, with a focus on how consumer preferences havechanged during the past five years and vis-à-vis the economic downturn and recovery. Itincludes: • Analysis of how Americans’ financial outlook influences their spending and payment preferences. • Demographic and psychographic profiling by payment form and consumer age, gender, race, geographic region, income, educational level, etc. • Focus chapter on cash, whose straightforwardness and immediacy makes it the payment choice of more than half of U.S. adults. • Focus chapter on checks, which despite declining usage remain popular for bill paying and are getting new legs via “digital reinvention.” • Focus chapter on credit cards, which have reached saturation and face other challenges including more restrictive legislation and declining usage among consumers looking to reduce their debt. • Focus chapter on debit cards, which continue to win followers but whose rise may be diverted by laws restricting overdraft fees. • Coverage of gift cards and other prepaid debit cards, which are creating a fast- growing “second-tier” banking system for those without access to traditional banks.
  • • Focus chapter on new payment methods, including contactless, cell phone and Internet-based, all of which are jockeying for position in the next wave of payment forms.Myriad data sources include primary data compiled by Experian Simmons and cross-tabulated by Packaged Facts to create customized profiles of those consumers shapingthe U.S. payments industry now and into the future.Table of ContentsConsumer Payment Trends in the U.S.Chapter 1: Executive Summary Scope of Report Methodology Check Remains Most Popular Form of Bill Payment Table 1-1: Mode of Bill Payment, 2009 (percent of U.S. adults and number in millions) Debit Cards Lead in Non-Cash Transactions Electronic Payment Share at 63% Government Study Confirms Market Directions Cash: Still Preferred by Over Half of Adults Making Purchases Checks: Also Still in Use by Over Half of Americans Credit Cards: Over Half of Americans Are Regular Users Debit Cards: Popularity Still Rising, But at Slower Rate Gift Cards, Prepaid Debit Cards, and Money Orders Online Payments Figure 1-1: Percentage of U.S. Adults Who Used Online Banking in Last 30 Days, 2004-2009 Spending Attitudes and Economic Sentiment A Stuttering Recovery Economic Downturn Dampens Americans’ Sense of Financial Security Table 1-2: Percentage of U.S. Adults Who Agree or Disagree with the Statement: “I Feel Secure Financially,” 2004-2009
  • Attitudes Toward Economy and Individual Financial Situation Financially Secure Big on Credit, Checks Figure 1-2: Payment Preferences Among the Financially Secure, 2009 (index) Financially Insecure Lean Toward Money Orders, DebitChapter 2: Market Overview Introduction Scope of Report Methodology Payment Trend Overview Check Remains Most Popular Form of Bill Payment Table 2-1: Payment Preferences in the U.S., 2009 (percent of U.S. adults and number in millions) Table 2-2: Mode of Bill Payment, 2009 (percent of U.S. adults and number in millions) Debit Cards Lead in Non-Cash Transactions Figure 2-1: Percentage of U.S. Non-Cash Payment Transactions: By Type, 2009 BAI/Hitachi Study Places Electronic Payment Share at 63% Government Study Confirms Market Directions Figure 2-2: Percentage Share of Non-Cash Payments: By Type, 2003 vs. 2006 Cash: Still Preferred by Over Half of Adults Making Purchases Table 2-3: Percentage of U.S. Adults Who Agree with the Statement: “I Often Prefer to Pay Cash for the Things I Buy,” 2004-2009 Checks: Also Still in Use by Over Half of Americans Figure 2-3: Percentage of U.S. Adults Who Have a Checking (Interest or Non- Interest) or Check Guarantee Card, 2004-2009 Credit Cards: Over Half of Americans Are Regular Users Table 2-4: Credit Card Ownership and Usage: By Frequency, 2004- 2009 (percent) Debit Cards: Popularity Still Rising, But at Slower Rate Table 2-5: Debit Card Ownership and Usage, 2004-2009 (percent)
  • Gift Cards, Prepaid Debit Cards, and Money OrdersFigure 2-4: Percentage of Debit Card Users: Banked vs. Unbanked, 2009Figure 2-5: Percentage of U.S. Adults Who Have Sent Money Withinthe U.S. in the Last 12 Months, 2004-2009Online PaymentsFigure 2-6: Percentage of U.S. Adults Who Used Online Banking in Last 30Days, 2004-2009Spending Attitudes and Economic SentimentThe Villains of the CrisisA Stuttering RecoveryEconomic Downturn Dampens Americans’ Sense of Financial SecurityTable 2-6: Percentage of U.S. Adults Who Agree or Disagree with the Statement:“I Feel Secure Financially,” 2004-2009Figure 2-7: Percentage of U.S. Adults Who Agree with the Statement: “I Don’tLike the Idea of Being in Debt,” 2004-2009Attitudes Toward Economy and Individual Financial SituationFigure 2-8: Expected Forms of Consumer Payment During Holiday Season, 2009(percent)Financial Situation Sentiments by DemographicsFigure 2-9: Percentage of U.S. Adults Who Feel Better or Worse OffFinancially Compared with 12 Months Ago, 2009AgeRaceIncome LevelsEducationGeographic RegionMarital Status and Children in HouseholdImpulse Shoppers and Informed ConsumersConsumer Financial Outlook Impact on Payment Preferences
  • Financially Secure Big on Credit, Checks Figure 2-10: Payment Preferences Among the Financially Secure, 2009 (index) Financially Insecure Lean Toward Money Orders, Debit Figure 2-11: Payment Preferences Among the Financially Insecure, 2009 (index) Responsible Spenders Figure 2-12: Payment Preferences Among Responsible Spenders, 2009 (index) Poor Savers and Careless Spenders Figure 2-13: Payment Preferences Among Careless Spenders, 2009 (index) Confident Consumers Table 2-7: Payment Forms by Level of Consumer Confidence: Low vs. High, 2009 (index) Payment Preferences by Demographics Age Table 2-8: Likelihood of Preferring Payment Forms: By Type and Age Group, 2009 Young Adults and Teens Picking Up Plastic Gender Race Table 2-9: Likelihood of Preferring Payment Forms: By Type and Race/Ethnicity, 2009 Geography Education Table 2-10: Likelihood of Preferring Payment Forms: By Type and Level of Educational Attainment, 2009 Income Table 2-11: Likelihood of Preferring Payment Forms: By Type and Household Annual Income, 2009Chapter 3: Cash Introduction Cash Is Elemental
  • Almost $800 Billion of U.S. Cash in Circulation Older and Less Wealthy Americans Prefer Cash Table 3-1: Cash Usage for Purchases or Bill Payment by Demographic, 2009 (index) Cash Preferred by Both Financially Secure and Insecure Table 3-2: Cash Usage for Purchases or Bill Payment by Level of Financial Security, 2009 (index) Cash’s Popularity Difficult to Gauge ATM Transactions Declining Figure 3-1: Monthly Number of ATM Transactions Per ATM in the U.S., 1996- 2008 Figure 3-2: Total Number of U.S. ATM Transactions, 1996-2008 (in billions) Figure 3-3: Number of ATM Machines in the U.S., 1996-2008 Blame It on Debit Cards Traveling Away from Cash “Cash Only” Signs and Cash Discounts A Second Coming of Cash Turning to Cash in Hard Times Calls to Redesign the DollarChapter 4: Checks Paper Checks Holding Out in Digital Age Table 4-1: Number and Value of Checks Collected by Federal Reserve Banks, 1920-2003 (in millions of dollars and numbers) The Fed’s Role in Check Processing Figure 4-1: Number of Checks Paid in the United States: 2001, 2003 and 2006 (number in billions) Electronic Checking Through ACH Table 4-2: Percentage Share Distribution of Non-Cash Payments: By Type, 2003 vs. 2006 The Demographics of Check Writers
  • Table 4-3: Check Usage by Demographic, 2009 (index) Responsible Spenders Use Checks Table 4-4: Likelihood of Check Usage by Financial Attitudes, 2009 (index) Checks Rare in the Retail Environment Figure 4-2: Checks’ Share of Consumers’ Holiday Payment Methods, 2007-2009 (percent) Overdrawn Checking Accounts a Cash Cow for Banks Figure 4-3: Growth in Average NSF Charges, Fall 1998-Fall 2009 The Unbanked Rely on Check-Cashing Outlets Looking Ahead: Digitalizing DepositsChapter 5: Credit Cards The Rise of the Credit Card Figure 5-1: Share of U.S. General-Purpose Debit, Credit and Charge Card Purchase Volume, 2008 (percent) Figure 5-2: Share of U.S. General-Purpose Credit and Charge Card Purchase Volume, 2008 (percent) Plastic Is Prevalent Cards Cram the Wallet Credit Cards for Everyone Top Credit Card Demographics One-Quarter of Americans Use Credit Cards for Bill Paying Table 5-1: Credit Card Ownership, Usage in Past 30 Days, and Usage for Bill Payment: By Demographic, 2009 (index) Cardholders Consider Themselves Financially Astute Table 5-2: Likelihood of Credit Card Usage by Financial Attitudes, 2009 (index) Carrying a Balance Figure 5-3: Consumer Credit Card Balances: Paid-Off Monthly vs. Balance Carried, 2009 (percent) Credit Trumps Debit for Pricey Items
  • Table 5-3: Preferred Payment Form by Spending Category: Credit Card vs. Debit Card, 2009 (percent) Table 5-4: Purchasing and Spending Expectations Among Credit Card Owners: Overall and Users in Past 30 Days, 2009 (index) Reward Cards Approaching 100% Figure 5-4: Percentage Share of Credit Card Market: U.S. Rewards- Based Cards vs. General-Purpose Cards Without Rewards, 2003, 2007 and 2011 But Rewards Less Rewarding for Issuers and Consumers The Shift Away from Credit Table 5-5: Percentage Share Distribution of Non-Cash Payments: By Type, 2003 vs. 2006 Table 5-6: Revolving Consumer Debt: 2004-2009 (in billions of dollars) Behind the Disenchantment with Credit “Evil, Thieving Bastards” Punctured Profitability Table 5-7: Return on Assets: Large U.S. Credit Card Banks, 1986- 2008 (percent) New Legislation Will Restrict Credit Card Industry Table 5-8: Key Provisions of the Credit Card: Accountability, Responsibility and Disclosure (CARD) Act of 2009 Income from Interchange Table 5-9: Changes in Visa and MasterCard Domestic Credit Card Interchange Fee Rates, Numbers, and Average Rates, 1991-2009 Interchange Under Attack Security a Concern Looking Ahead End of Excess Returning to Charge Roots Shifting Fees, Diluted RewardsChapter 6: Debit Cards, Gift Cards and Prepaid Debit Cards
  • Debit CardsDebit Cards Push Out in FrontTable 6-1: Percentage Share Distribution of Non-Cash Payments: By Type, 2003vs. 2006Recession Driving Even More Americans to DebitVisa Dominates DebitDebit Disadvantages for ConsumersRise in Debit Card OwnershipTable 6-2: ATM/Debit Card Ownership and Frequency of Usage, 2004-2009(percent)Debit Card DemographicsTable 6-3: Likelihood of Debit Card Usage by Demographic, 2009 (index)Heavy Debit Users Feel Financially InsecureTable 6-4: Likelihood of ATM/Debit Card Ownership and Usage by FinancialAttitudes, 2009 (index)Rewards Programs Expected to GrowThe Tug-of-War Between PIN and Signature DebitConsumers’ Stance on PIN and Signature DebitFigure 6-1: Ranking of Payment Methods When Making a Purchase at a GroceryStore, 2008 (On a scale of 1 to 7, 1 being most preferred)Cascading Overdraft FeesTable 6-5: Percentage of Consumers Preferring That Debit Card Be Declined IfAccount Overdrawn: By Transaction Amount, 2008Clamping Down on OverdraftGift CardsGrowth of the Gift CardSize of Gift Card MarketGift Cards Have Fallen from Their HighTable 6-6: Gift Card Purchasing in Last 12 Months: Overall and by Type andBrand, 2009 (percent)
  • But Gift Cards Still Advancing Figure 6-2: Percentage of U.S. Shoppers Hoping to Receive Gift Cards During the Holiday Season, 2004-2009 Gift Card Drawbacks Overspending or Not Spending at All Prepaid Debit Cards Prepaid Lifts Off Table 6-7: Prepaid Card (Not Gift Card) Purchasing in Last 12 Months: Overall and by Brand, 2009 (percent) The Plusses of Prepaid Table 6-8: Very Important Reasons Consumers Choose Prepaid Debit, 2009 (percent) The Prepaid Population Figure 6-3: Ownership and Awareness of Prepaid Cards Among Check-Cashing Store Customers, 2009 (percent) Funded by Fees Secondary Banking System Prepaid in the Public and Private Sectors Payroll Cards Looking Ahead Debit on a Roll Prepaid Well-Positioned Decoupled Debit Looking for TractionChapter 7: Online, Alternative and Emerging Payment Forms Online and Alternative Payments Introduction Online Bill Pay Catches on Quickly Demographics of Online Bill Pay Users Table 7-1: Online Bill Pay Usage by Demographic, 2009 (index and number in millions)
  • Alternative Payments Butt Heads with Cards Table 7-2: Percentage of Transaction Volume: By Internet Payment Vehicle, 2005 vs. 2008 (in billions of dollars and percentage of transaction volume) PayPal Google Checkout Amazon Payments Bill Me Later eBillMe Zong, Boku, and Kwedit RevolutionCard Contactless Cards and Mobile Payments Payments Without Contact Contactless Not Connecting Trends in Mobile Payments Security Worries Growing Interest Awaiting a Breakthrough Mobility Versatility Peer-to-Peer Payments Going After Cash Obopay Eyes on the iPhoneAvailable immediately for Online Download athttp://www.marketresearch.com/product/display.asp?productid=2445009   US: 800.298.5699
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