Digital wallets gain momentum as preferred payment in North America
Digital wallets and payment apps – such as PayPal, Apple Pay, and Google Wallet – are now the fourth most popular payment method for online purchases made by North American consumers, according to a new survey.
The 2023 North America Online Payment Methods survey by Research and Markets showed consumers use digital payment methods at least five times per month.
The top three payment methods, not surprisingly, are debit cards, cash, and credit cards.
The convenience factor when using digital wallets for online purchases was listed as one of the reasons for the uptick in its use.
In fact, 25% of survey participants said having an e-wallet actually encouraged them to shop online.
PayPal was found to be the most popular app used to make digital payments, followed by Apple Pay and Venmo.
Research and Markets say the introduction of contactless credit and debit cards, especially during the pandemic, is one of the main reasons physical cards have stayed in the top three ranking among payment methods.
The contactless one-tap method used by almost all banks and credit card companies, as well as “buy now pay later” (BNPL), are able to satisfy consumer demands for “seamless payment options at checkout,” Research and Markets said.
The survey showed consumers have also embraced account-to-account (A2A) and machine-to-machine (M2M) payment methods due to their speed, convenience, and control.
A2A apps like Venmo and Zelle, as well as Square’s Afterpay for BNPL payments, are some of the most well known.
M2M apps like PayRange and Virtusa make payments using a connected (IoT) device without human interaction.
The use of mobile wallets is expected to increase dramatically over the next few years as more IoT devices flood the market and more payment apps incorporate AI and machine learning into their platforms, experts say.