Changes in shopping and payment habits take time to evolve, many taking years before achieving widespread adoption — that is, until COVID-19. Overnight retailers were forced to address matters of health and safety for their shoppers and adjust to new demands for contactless payments, online shopping, curbside pickup and delivery. Out of all of this, a new payment star was born — the mobile wallet. No longer a solution in search of a problem, a star underdelivering on a promise. Instead wallet adoption was jumpstarted as consumers are finding them to be a safer way to pay and merchants have quickly expanded their acceptance. As a result, wallets are experiencing a surge in usage, particularly among Gen Z and millennials, thereby, cementing their role in the future of POS.
This new study from Arizent — parent company of American Banker, Employee Benefit News, National Mortgage News, Digital Insurance and Financial Planning — explores how COVID-19 impacted customer shopping and payment patterns and how it will influence the future POS.
Key findings include:
- Consumers have responded to the pandemic by shopping less frequently in-store, more online and adopting a hybrid channel model. This has caused retailers to expand e-commerce sales, add curbside pickup as well as to offer delivery services.
- Consumers have also changed how they pay in-stores with 21% changing their primary payment method altogether in just over a year’s time.
- Mobile wallets received a strong boost in new users and increased usage among existing users for both general purpose wallets, e.g., Apple Pay, and retail wallets, e.g., Starbucks.
- Half of consumers are now active mobile wallet users. The figure jumps to about two thirds for Gen Z and millennials, as well as more than half for Gen X.
- The expansion and adoption of new contactless payments, self-checkout and checkout-free technologies all serve to support wider mobile wallets usage.
Why read this report?
The pandemic’s onrush caught consumers and retailers ill-prepared to deal with the needed safety changes for in-store shopping, forcing both groups to set aside old payment habits and acceptance norms. The flood of contactless cards and the newfound utility in mobile wallets only added to the demand for change. The net effect is that any pre-pandemic logic on mobile wallets is no longer relevant and new wallet insights are needed to navigate the market.