The way consumers shop is changing. With constraints imposed on daily lives due to COVID-19, consumers are adopting new payment habits at an accelerated pace, according to a global study by Mastercard conducted in 15 markets. Consumers are increasingly moving away from cash and opting for contact-free and digital payments experiences ? and they don?t expect to go back. E-commerce is also seeing a surge, with Mastercard SpendingPulse reporting record growth rates across the globe as consumers increasingly shop online.
As payment behaviors evolve, two notable trends emerge in the research:
In store, a massive move away from cash: Globally, almost seven in 10 consumers say the shift to digital payments will likely be permanent, and nearly half of consumers plan to use cash less, even after the pandemic subsides, according to a Mastercard weekly survey launched April 27.
Since the pandemic began, nearly half (46%) of respondents in Asia Pacific say they are using cash less often, while two-thirds of Latin American consumers say they are using cash less or not at all. In Europe, which already had the largest adoption of contactless payments of any region, 64% say tap and pay is now their preferred way to pay in-store.
- A steep increase in e-commerce: As highlighted in Mastercard?s newly released Recovery Insights: Shift to Digital report, e-commerce has reached new heights. Mastercard SpendingPulse, which measures retail sales across all payment types including cash and check, shows that United States e-commerce spending grew by 93% year-over-year in the month of May. And in April and May, e-commerce as a share of total retail sales reached 33% in the United Kingdom ? an unprecedented high (ex. auto, petrol and restaurants).
?While no one could have predicted the state of the world we?re in today, it has reinforced the necessity for us to continue evolving the consumer payment experience to meet the consumer wherever they are,? says Jorn Lambert, Executive Vice President, Digital Solutions. ?We?ve been focused on building our Digital-First capabilities for years, which have enabled this accelerated shift to digital payments ? it?s unlikely consumers will revert to old payment habits.?
Building the Foundation for the Future of Payments
From a simplified online checkout experience to an in-store tap on a contactless terminal, Mastercard is leveraging its insights and technology, forging critical partnerships and driving innovation to ensure a solid foundation to deliver the future of payments.
- Using non-sensitive data to enhance security: Mastercard Digital Enablement Service (MDES) turns card numbers into tokens that become useless to fraudsters and eliminates the frustration of manually updating your card information.
- One-click payments to speed checkout: Click to Pay, the one-click checkout experience, uses tokenization to secure consumer?s card credentials and makes passwords a thing of the past.
- Digital First powers consumer choice: Even before the pandemic, mobile devices have been the primary source of communication, information and, increasingly, commerce. That?s why, instead of merely supporting physical cards with digital experiences, the focus has been on designing digital products from the ground up, with the physical card optional.
?Amidst an incredibly challenging time for individuals, for communities and for businesses, we?re seeing sparks of change brought upon by the growth of digitally-savvy consumers and businesses embracing technology that will enable a swifter, more secure future,? Lambert added.
Mastercard proprietary study was conducted from April 27 to May 17, 2020, among adults (18+). 6,750 interviews were conducted across 15 countries: Australia, Brazil, China, Colombia, France, Germany, India, Italy, Spain, Japan, Mexico, Russia, United Arab Emirates, United Kingdom, and The United States of America.