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New Study Finds Digital Payment Adoption And Contactless Payments Surge Three Years Ahead Of Expectations

New Study Finds Digital Payment Adoption And Contactless Payments Surge Three Years Ahead Of Expectations

New Study Finds Digital Payment Adoption And Contactless Payments Surge Three Years Ahead Of Expectations

As consumers return to pre-pandemic routines, including in-store shopping, some of their new behaviors that were picked up during the pandemic are likely to stick and supporting those habits will be key to retaining their loyalty.

According to a new study conducted by global payments provider Blackhawk Network, shoppers across all regions reported they are likelier to spend more money and have a deeper connection with retailers that offer more digital payment methods. The Global Digital Payments study surveyed more than 13,000 respondents across nine countries representing nearly half of the world’s card payment volume.

“Shoppers continue to look for easier ways to tap into mobile wallets, digital gift cards, rewards and loyalty points, and as a result, are increasingly seeking retailers that have embraced digital and contactless payments,” said Theresa McEndree, global head of marketing, Blackhawk Network.

“Our research shows that consumers around the world are drawn to retailers that offer fast, seamless and secure digital payments. As we start to hit more of a stride in our economic recovery, the winners will be the merchants that cater to the everyday digital payment preferences of today’s shopper.”

The study dives into a global view on how consumers are currently utilizing digital wallets, gift cards and rewards and the motivation behind the continued use of these methods. Furthermore, the research also explores the factors that encourage consumers to shop with a specific retailer and how shoppers may deepen their affinity for retailers that offer and accept digital payment options.

Some key findings to emerge from the study include:

The eCommerce surge has created new relationships between shoppers and retailers that offer digital payments

Over the course of the coronavirus pandemic, especially at its height, consumers made a major shift toward contactless options such as digital wallets, digital gift cards, QR codes and barcodes.

The data reveals that these digital offerings have impacted how shoppers feel about a particular brand and how often they shop with that specific retailer. And retailers who chose to embrace these solutions reaped the benefits as they saw their customers spend more money and have a deeper affinity for that brand.

According to the report, 69 percent of digital wallet users across all regions tend to shop more often since using a digital wallet, while 54 percent of the people surveyed revealed that they are more likely to shop and spend more with retailers that offer digital payments. Additionally, a majority of shoppers surveyed (85 percent) also reported that digital wallets have made shopping easier.

The top retail segments that thrived through the utilization of digital wallets were online-only retailers (41 percent), grocery stores (37 percent) and mass merchandisers (26 percent).

QR codes finally became a thing

Remember when QR codes were first introduced? Kind of. Sort of. But more importantly, no one really cared. Until now.

Over the years, several attempts were made to use QR codes to offer greater utility and drive adoption among consumers, but nothing ever came of it. But since the rise of the pandemic, both brands and retailers have been looking to create a more personalized yet contactless experience to help drive sales both in-store and online.

According to Blackhawk Network findings, 18 percent of respondents used a QR code or barcode for the first time during the pandemic, while 40 percent said they started using them more often.

Digital gift cards saw major traction

The emergence of this trend mainly started as a quick and easy way to show support to small businesses that temporarily had to close their doors during the outbreak. The solution offered upfront cash to merchants and allowed customers to later indulge in on their services, especially as curbside and buy online, pickup in-store (BOPIS) services became popular. The solution offering since then, however, has expanded across all organization sizes as it proved to be safe, secure and easy to use.

That said, digital gift cards experienced a boost from self-use as 34 percent of respondents reported purchasing a physical or digital gift card for themselves in the last year. In comparison, 46 percent of respondents reported an interest in digital gift cards to make purchases online.

Digital wallet friction still remains

While the adoption of mobile wallets has taken off over the past year, a truly seamless experience still does not exist.

One of the biggest complaints to arise is the inability to use mobile wallets everywhere (50 percent revealed this as a disadvantage) as well as the inability to use the same mobile wallet at the same retailer in-store and online (30 percent of respondents reported on this).

Furthermore, 27 percent stated that there were too many digital wallet options, while 20 percent revealed that they still were not as comfortable using digital wallets and opted for traditional forms of payments.

But while friction remains, there still lies an opportunity. Sixty-three percent of people surveyed report they are more likely to shop at a retailer if they accept the digital payments they use. Meanwhile, 73 percent of respondents said they are looking for a more seamless omnichannel experience and they want to pay the same way they pay online and in-store.

Digital payments can help in-store retail rebound

Since COVID-19, two in five respondents indicate that they would defer to online shopping experiences versus in-store. But once the world has returned to pre-pandemic levels, more consumers (55 percent of respondents) are willing to opt for in-store experiences.

More than half of respondents reveal that they would opt to return in-store. Of these, 51 percent reveal that the main reason for this is that they miss the ability to see and touch items in-store before purchasing – something eCommerce has yet to fully figure out.

The countries surveyed in the report were the United States, Australia, Brazil, Canada, Germany, India, Mexico, Netherlands as well as the United Kingdom.

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