Lost in Transaction 2022: how consumers globally are changing the way they pay

Chirag Patel
5 September, 22
Since 2017, we’ve been surveying consumers about their evolving payment habits and preferences. How is the skyrocketing cost of living affecting how we choose to pay?

Since 2017, we’ve been surveying consumers about their evolving payment habits and preferences. How is the skyrocketing cost of living affecting how we choose to pay? What are the latest attitudes to alternative payment methods, post pandemic? In April this year, we asked 11,000 consumers in 10 countries across Europe and the Americas to find out. Here are some key take-aways from that research.

Consumers are more closely tracking their spending

With many households tightening their belts due to the rising cost of living, consumers are reconsidering how they pay online. 44% of respondents have changed their habits, and the majority of those have switched to payment methods that track spending more accurately.

Of those who have changed the way they’re paying, debit cards are the most preferred online payment method overall. 59% of respondents paid with a debit card in the month prior to taking our survey — a 5% increase over 2021. Digital wallet use has increased too, two fifths (41%) are using them more than they did a year ago. 16% of those who changed their payment methods are paying with crypto more often. 

Credit-based payment methods, however, are trending downwards, with one notable exception: credit cards. With usage at 51%, credit cards remain the second most popular payment method for online purchases. They’re also the preferred way to pay when the purchase is a long-haul flight, holiday, household appliance, or another big-ticket item.

Cash is moving online

Cash is alive and well: 59% of respondents think it is the most reliable form of payment and 70% would be worried if they couldn’t access it anymore.

It is also growing as an online payment method. eCash payments — online transactions paid in cash — have increased. 47% of respondents would prefer to make online purchases in cash, and 44% would buy online more often if they could pay in cash.

26% of those who have changed their payment habits due to inflation are using eCash more often. This suggests they may be using it to control their online spending, but online security is another reason for its popularity.

Safety first, but not if it adds friction

For 44% of respondents, security is the primary consideration when choosing how to pay online. This needs to be addressed upfront in order to drive the first transaction. 70% prefer not to share their financial details, and 62% would worry if they weren’t asked for any security information before completing payment.

But while security is undoubtedly top of mind for most customers, that’s not to say they’re prepared to jump through hoops if this made online commerce safer. 44% are happy with the current balance between security and convenience, and 23% would accept additional security measures only if the inconvenience were minimal.

The untapped embedded payments opportunity

Embedded payment technology, which enables non-financial brands to integrate  payments into their user journeys, has attracted huge levels of interest. Our research confirms its incredible potential, but even though many consumers have probably used embedded payment technology, 49% haven’t heard of the term.

The good news is that 31% can see themselves using embedded payments within the next two years if they learn more about the technology and it becomes more widely available. The 51% who have heard of the term also feel positive about embedded payments, with the majority believing they’re safer than traditional payments.

Given consumers’ lowering tolerance for risk and their unwillingness to accept more friction, embedded payments are a huge opportunity. By educating their customers about the technology’s benefits — particularly how it can strike a better balance between security and convenience — merchants can boost trust and increase loyalty while building a healthy new revenue stream.

What’s next?

With inflation projected to rise further, customers are likely to become even more selective about how they spend online. They’ll also continue expecting to pay securely with minimal friction. A great, streamlined user experience is table stakes.

From a merchant’s perspective, it’s clear offering a broader mix of payments, including eCash, is a must. Customers want more flexibility and control. And forcing them to use a particular payment method simply won’t cut it.

Crucially, to build stronger, lasting relationships, merchants have to engage and educate customers. While technologies like embedded payments can make payments safer and more convenient, concerns and misconceptions won’t go away unless they’re tackled head on.

Read the full Lost In Transaction report: Consumer payment trends 2022: Navigating online payments in the age of uncertainty.

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