Consumer Payment Trends in the U.S.

Published: April 1, 2010 - 202 Pages

Table of Contents

  • Executive Summary
    • Scope of Report
    • Methodology
    • Check Remains Most Popular Form of Bill Payment
      • Table Mode of Bill Payment, 2009 (percent of U.S. adults and number in millions)
    • Debit Cards Lead in Non-Cash Transactions
    • Electronic Payment Share at 63%
    • Government Study Confirms Market Directions
    • Cash: Still Preferred by Over Half of Adults Making Purchases
    • Checks: Also Still in Use by Over Half of Americans
    • Credit Cards: Over Half of Americans Are Regular Users
    • Debit Cards: Popularity Still Rising, But at Slower Rate
    • Gift Cards, Prepaid Debit Cards, and Money Orders
    • Online Payments
    • Spending Attitudes and Economic Sentiment
    • A Stuttering Recovery
    • Economic Downturn Dampens Americans' Sense of Financial Security
      • Table Percentage of U.S. Adults Who Agree or Disagree with the Statement: "I Feel Secure Financially," 2004-2009
    • Attitudes Toward Economy and Individual Financial Situation
    • Financially Secure Big on Credit, Checks
    • Financially Insecure Lean Toward Money Orders, Debit
  • Market Overview - Highlights
  • Market Overview
    • Introduction
      • Scope of Report
      • Methodology
    • Payment Trend Overview
      • Check Remains Most Popular Form of Bill Payment
        • Table Payment Preferences in the U.S., 2009 (percent of U.S. adults and number in millions)
        • Table Mode of Bill Payment, 2009 (percent of U.S. adults and number in millions)
      • Debit Cards Lead in Non-Cash Transactions
      • BAI/Hitachi Study Places Electronic Payment Share at 63%
      • Government Study Confirms Market Directions
      • Cash: Still Preferred by Over Half of Adults Making Purchases
        • Table Percentage of U.S. Adults Who Agree with the Statement: "I Often Prefer to Pay Cash for the Things I Buy," 2004-2009
      • Checks: Also Still in Use by Over Half of Americans
      • Credit Cards: Over Half of Americans Are Regular Users
        • Table Credit Card Ownership and Usage: By Frequency, 2004-2009 (percent)
      • Debit Cards: Popularity Still Rising, But at Slower Rate
        • Table Debit Card Ownership and Usage, 2004-2009 (percent)
      • Gift Cards, Prepaid Debit Cards, and Money Orders
      • Online Payments
    • Spending Attitudes and Economic Sentiment
      • The Villains of the Crisis
      • A Stuttering Recovery
      • Economic Downturn Dampens Americans' Sense of Financial Security
        • Table Percentage of U.S. Adults Who Agree or Disagree with the Statement: "I Feel Secure Financially," 2004-2009
      • Attitudes Toward Economy and Individual Financial Situation
      • Financial Situation Sentiments by Demographics
      • Age
      • Race
      • Income Levels
      • Education
      • Geographic Region
      • Marital Status and Children in Household
      • Impulse Shoppers and Informed Consumers
      • Consumer Financial Outlook Impact on Payment Preferences
      • Financially Insecure Lean Toward Money Orders, Debit
      • Responsible Spenders
      • Poor Savers and Careless Spenders
      • Confident Consumers
        • Table Payment Forms by Level of Consumer Confidence: Low vs. High, 2009 (index)
    • Payment Preferences by Demographics
      • Age
        • Table Likelihood of Preferring Payment Forms: By Type and Age Group, 2009
      • Young Adults and Teens Picking Up Plastic
      • Gender
      • Race
        • Table Likelihood of Preferring Payment Forms: By Type and Race/Ethnicity, 2009
      • Geography
      • Education
        • Table Likelihood of Preferring Payment Forms: By Type and Level of Educational Attainment, 2009
      • Income
        • Table Likelihood of Preferring Payment Forms: By Type and Household Annual Income, 2009
  • Cash - Highlights
  • Cash
    • Introduction
      • Cash Is Elemental
      • Almost $800 Billion of U.S. Cash in Circulation
      • Older and Less Wealthy Americans Prefer Cash
        • Table Cash Usage for Purchases or Bill Payment by Demographic, 2009 (index)
      • Cash Preferred by Both Financially Secure and Insecure
        • Table Cash Usage for Purchases or Bill Payment by Level of Financial Security, 2009 (index)
      • Cash's Popularity Difficult to Gauge
      • ATM Transactions Declining
      • Blame It on Debit Cards
      • Traveling Away from Cash
      • "Cash Only" Signs and Cash Discounts
      • A Second Coming of Cash
      • Turning to Cash in Hard Times
      • Calls to Redesign the Dollar
  • Checks - Highlights
  • Checks
    • Paper Checks Holding Out in Digital Age
      • Table Number and Value of Checks Collected by Federal Reserve Banks, 1920-2003 (in millions of dollars and numbers)
    • The Fed's Role in Check Processing
    • Electronic Checking Through ACH
      • Table Percentage Share Distribution of Non-Cash Payments: By Type, 2003 vs. 2006
    • The Demographics of Check Writers
      • Table Check Usage by Demographic, 2009 (index)
    • Responsible Spenders Use Checks
      • Table Likelihood of Check Usage by Financial Attitudes, 2009 (index)
    • Checks Rare in the Retail Environment
    • Overdrawn Checking Accounts a Cash Cow for Banks
    • The Unbanked Rely on Check-Cashing Outlets
    • Looking Ahead: Digitalizing Deposits
  • Credit Cards - Highlights
  • Credit Cards
    • The Rise of the Credit Card
    • Plastic Is Prevalent
    • Cards Cram the Wallet
    • Credit Cards for Everyone
    • Top Credit Card Demographics
    • One-Quarter of Americans Use Credit Cards for Bill Paying
      • Table Credit Card Ownership, Usage in Past 30 Days, and Usage for Bill Payment: By Demographic, 2009 (index)
    • Cardholders Consider Themselves Financially Astute
      • Table Likelihood of Credit Card Usage by Financial Attitudes, 2009 (index)
    • Carrying a Balance
    • Credit Trumps Debit for Pricey Items
      • Table Preferred Payment Form by Spending Category: Credit Card vs. Debit Card, 2009 (percent)
      • Table Purchasing and Spending Expectations Among Credit Card Owners: Overall and Users in Past 30 Days, 2009 (index)
    • Reward Cards Approaching 100%
    • But Rewards Less Rewarding for Issuers and Consumers
    • The Shift Away from Credit
      • Table Percentage Share Distribution of Non-Cash Payments: By Type, 2003 vs. 2006
      • Table Revolving Consumer Debt: 2004-2009 (in billions of dollars)
    • Behind the Disenchantment with Credit
    • "Evil, Thieving Bastards"
    • Punctured Profitability
      • Table Return on Assets: Large U.S. Credit Card Banks, 1986-2008 (percent)
    • New Legislation Will Restrict Credit Card Industry
      • Table Key Provisions of the Credit Card: Accountability, Responsibility and Disclosure (CARD) Act of 2009
    • Income from Interchange
      • Table Changes in Visa and MasterCard Domestic Credit Card Interchange Fee Rates, Numbers, and Average Rates, 1991-2009
      • Interchange Under Attack
    • Security a Concern
    • Looking Ahead
      • End of Excess
      • Returning to Charge Roots
      • Shifting Fees, Diluted Rewards
  • Debit Cards, Gift Cards and Prepaid Debit Cards - Highlights
  • Debit Cards, Gift Cards and Prepaid Debit Cards
    • Debit Cards
      • Debit Cards Push Out in Front
        • Table Percentage Share Distribution of Non-Cash Payments: By Type, 2003 vs. 2006
      • Recession Driving Even More Americans to Debit
      • Visa Dominates Debit
      • Debit Disadvantages for Consumers
      • Rise in Debit Card Ownership
        • Table ATM/Debit Card Ownership and Frequency of Usage, 2004-2009 (percent)
      • Debit Card Demographics
        • Table Likelihood of Debit Card Usage by Demographic, 2009 (index)
      • Heavy Debit Users Feel Financially Insecure
        • Table Likelihood of ATM/Debit Card Ownership and Usage by Financial Attitudes, 2009 (index)
      • Rewards Programs Expected to Grow
      • The Tug-of-War Between PIN and Signature Debit
      • Consumers' Stance on PIN and Signature Debit
      • Cascading Overdraft Fees
        • Table Percentage of Consumers Preferring That Debit Card Be Declined If Account Overdrawn: By Transaction Amount, 2008
      • Clamping Down on Overdraft
    • Gift Cards
      • Growth of the Gift Card
      • Size of Gift Card Market
      • Gift Cards Have Fallen from Their High
        • Table Gift Card Purchasing in Last 12 Months: Overall and by Type and Brand, 2009 (percent)
      • But Gift Cards Still Advancing
      • Gift Card Drawbacks
      • Overspending or Not Spending at All
    • Prepaid Debit Cards
      • Prepaid Lifts Off
        • Table Prepaid Card (Not Gift Card) Purchasing in Last 12 Months: Overall and by Brand, 2009 (percent)
      • The Plusses of Prepaid
        • Table Very Important Reasons Consumers Choose Prepaid Debit, 2009 (percent)
      • The Prepaid Population
      • Funded by Fees
      • Secondary Banking System
      • Prepaid in the Public and Private Sectors
      • Payroll Cards
    • Looking Ahead
      • Debit on a Roll
      • Prepaid Well-Positioned
      • Decoupled Debit Looking for Traction
  • Online, Alternative and Emerging Payment Forms - Highlights
  • Online, Alternative and Emerging Payment Forms
    • Online and Alternative Payments
      • Introduction
      • Online Bill Pay Catches on Quickly
      • Demographics of Online Bill Pay Users
        • Table Online Bill Pay Usage by Demographic, 2009 (index and number in millions)
      • Alternative Payments Butt Heads with Cards
        • Table Percentage of Transaction Volume: By Internet Payment Vehicle, 2005 vs. 2008 (in billions of dollars and percentage of transaction volume)
      • PayPal
      • Google Checkout
      • Amazon Payments
      • Bill Me Later
      • eBillMe
      • Zong, Boku, and Kwedit
      • RevolutionCard
    • Contactless Cards and Mobile Payments
      • Payments Without Contact
      • Contactless Not Connecting
      • Trends in Mobile Payments
      • Security Worries
      • Growing Interest
      • Awaiting a Breakthrough
      • Mobility Versatility
      • Peer-to-Peer Payments Going After Cash
      • Obopay
      • Eyes on the iPhone

Abstract

Businesses routinely seek to appeal to consumers by understanding which goods or services they want to buy. But understanding how shoppers prefer to buy—that is, which forms of payments they favor, and why—is also critically important. Marketers, retailers, card associations and other product and service providers hope to make transactions easy and convenient for consumers, but they must also balance these requirements against their own needs. Meanwhile, in the post-recession U.S. marketplace the world of payments keeps evolving as consumers back away from credit cards, debit cards move toward saturation, online payment options proliferate, and contactless payments and mobile payments move closer on the horizon.

This all-new report from Packaged Facts examines consumer payment forms of all kinds, including credit cards, debit cards, gift/prepaid cards, cash, checks, online payment and emerging forms, with a focus on how consumer preferences have changed during the past five years and vis-à-vis the economic downturn and recovery. It includes:

  • Analysis of how Americans’ financial outlook influences their spending and payment preferences.
  • Demographic and psychographic profiling by payment form and consumer age, gender, race, geographic region, income, educational level, etc.
  • Focus chapter on cash, whose straightforwardness and immediacy makes it the payment choice of more than half of U.S. adults.
  • Focus chapter on checks, which despite declining usage remain popular for bill paying and are getting new legs via “digital reinvention.”
  • Focus chapter on credit cards, which have reached saturation and face other challenges including more restrictive legislation and declining usage among consumers looking to reduce their debt.
  • Focus chapter on debit cards, which continue to win followers but whose rise may be diverted by laws restricting overdraft fees.
  • Coverage of gift cards and other prepaid debit cards, which are creating a fast-growing “second-tier” banking system for those without access to traditional banks.
  • Focus chapter on new payment methods, including contactless, cell phone and Internet-based, all of which are jockeying for position in the next wave of payment forms.

Myriad data sources include primary data compiled by Experian Simmons and cross-tabulated by Packaged Facts to create customized profiles of those consumers shaping the U.S. payments industry now and into the future.

Read an excerpt from this report below.


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