One in five (20%) consumers used a digital wallet for the first time or started using one regularly in 2020, according to new research from international payment service provider and direct bank card acquirer ECOMMPAY.
A further 38% also say they now have a digital wallet stored on their phone, increasing to almost half (46%) of those living in Greater London. The survey also showed that over two thirds (68%) of people use cash less frequently now compared to before the pandemic, indicating that there will be a definitive shift away from cash payments as lockdowns continue to ease.
The research comes as part of ECOMMPAY’s latest whitepaper: ‘The future of payments post-Brexit: what to consider to move with the times’, which considers the impact of Brexit and Covid-19 on trade in or with the UK, provides key data-driven recommendations and forecasts for online businesses, and shows how fintech innovations can simplify cross-border trading. The whitepaper was built on insights from two surveys: one of 1,002 UK consumers and one of 500 business leaders in the UK, conducted by ECOMMPAY in collaboration with Censuswide in March 2021.
Older age groups have embraced digital wallets and online shopping
The research found that older generations are embracing new payment technologies more than ever before. One in five (21%) 45 to 54-year-olds have increased their digital wallet usage during the pandemic, while more than half (51%) of over 55s say they have used a digital wallet.
Younger people – 16% of whom said they only pay using digital wallets – also continued their move towards contactless payment methods, with 44% of Gen Z increasing their digital wallet usage during the pandemic. Demonstrating these new habits are set to stay, almost one-third (31%) of people said that the pandemic has changed their preferred payment method.
The report also finds that in spite of coronavirus restrictions being lifted, fewer than one-third (30%) of people say they will mainly shop in a store, even with a reduced Covid-19 threat. Just one in 10 (10%) said they would only shop in-store. For women in particular, online spending is set to continue, with only 38% likely to return to predominantly shopping in-store. In comparison, more than one in four (43%) men plan to return to stores.
Where previously older generations might have preferred to shop in stores, 31% of 45 to 54-year-olds say they are planning to continue shopping online once the pandemic is over. Unsurprisingly, younger people plan to continue their online shopping habits too, with only 19% of 16 to 24-year-olds saying they will shop more in-store than online.
However, while online shopping popularity will remain, consumers are concerned about Brexit-induced price fluctuations too, suggesting they may favour more domestic purchases. More than two-thirds of consumers (67%) say they buy internationally at least once a year (with 21% doing so every two to six months), 68% say they are ‘very’ or ‘somewhat’ concerned about the cost of goods increasing for online cross-border purchases post-Brexit.
Commenting on the findings, Paul Marcantonio, Executive Director UK & Western Europe at ECOMMPAY, said: “It’s no secret that consumer habits and payment preferences have been evolving for some time, but this latest data-set confirms not only that the pandemic’s acceleration of attitudes towards digital wallet usage and online shopping has radically shifted, but that they’re here to stay. Businesses must take note of these shifts and ensure their payment processes align with users’ preferred payment methods, prioritise checkout page efficiency, and ensure shoppers feel comfortable that payments are being processed safely and securely.”
The data is accompanied by the launch of ECOMMPAY Shop, a tool that allows businesses to find and determine the most appropriate and popular payment methods with ease. Part of the ECOMMPAY ecosystem, the feature allows companies to select the parameters that apply to their business, sector, target regions and how best to facilitate the payments required. The tool will help retailers reduce the number of potential sales halted as a result of improper payment methods.