Apply CIS Tag

The payments landscape is rapidly evolving, and as businesses set their strategic agendas for the new year, it’s important to analyze and adapt to changing consumer payment behaviors. Here are a few payment trends to look out for: Consumer sentiment remains low while inflation hits 39-year high According to the University of Michigan’s latest consumer sentiment survey, sentiment rose to 70.4 in December 2021 from 67.4 in November. While this was a slight improvement from the 10-year low logged in November, the figure was roughly in line with the average reading of the past four months (70.6). Additionally, consumer prices increased 6.8% over the past year, the highest in nearly 40 years. When asked whether inflation or unemployment was the more serious problem facing the nation, 76% of survey respondents selected inflation while 21% selected unemployment. Rising prices and the uncertainty surrounding the Delta and Omicron variants may cause consumers to remain pessimistic about their personal financial progress and delay large purchases. Payment preferences vary by age and purchase type According to a recent Mintel report, credit cards are the most preferred method of payment among U.S. adults. Despite the overall preference for credit cards, attitudes toward this payment option differ based on consumer age. Credit card preference skews strongly toward older consumers, with 46% of Baby Boomers opting to use credit cards for most of their purchases and 72% of the World War II generation preferring credit cards to any other payment type. Conversely, younger generations are turning to cash, debit cards and digital payment alternatives for most of their purchases. This difference can be explained by younger consumers’ fear of debt and lack of credit education. While older consumers may feel more comfortable and capable of paying off their credit card bill each month, most Gen Z consumers are not creditworthy enough to own a credit card or are afraid of falling behind on their monthly payments. Though Gen Z’s low ownership rate may seem concerning to credit card issuers, there’s an enormous opportunity for them to reach and engage this younger cohort. By educating younger consumers about their products and the importance of building credit, credit card issuers can build lasting customer relationships and maintain their standing in the payments hierarchy. Payment preferences also vary by purchase type. Consumers mostly use debit cards and credit cards for in-store purchases, while direct payments from bank accounts are used to pay off recurring bills. Despite these preferences for card and online payments, cash remains a popular secondary payment method across age demographics. Older consumers use cash to make small, personal transactions, while younger consumers are more likely to use cash or debit cards for large purchases. Digital payment popularity continues to soar From 2019 to 2020, peer-to-peer payment (P2P) services, like Venmo, Zelle and Cash App, saw usage increases of 2 to 3 percentage points. In 2021, that year-over-year increase jumped to 8, 9 and 7 percentage points respectively. This jump indicates that while consumers may have been reluctant to adjust their payment behaviors at the beginning of the pandemic, ongoing social distancing measures forced them to adapt to a new reality, leading to the widespread adoption of digital payment methods. As consumers continue to embrace P2P services, traditional payment powerhouses must pivot their strategies to capitalize on this trend and remain competitive in today’s payments landscape. To keep up with the latest consumer and economic trends, register for our upcoming Monthly Credit and Economic Trends webinar.

Discover how you can leverage expanded data sources to make better decisions and empower consumers to more easily access financial opportunities.

Direct mail isn’t outdated, antique or ineffective – it has evolved and adapted to meet the expectations of today’s consumers.

Experian was recently named a global fintech leader in the Center for Financial Professionals (CeFPro) Fintech Leaders 2022 report.

Providing value to consumers is no longer just about offering great products & services; it’s about helping them achieve their financial goals.

Generation Z has money on their minds, and as their appetite for personal finance grows, financial institutions better be ready.

Experian has made the IDC 2021 Fintech Rankings Top 100, highlighting the best global providers of financial technology. Read more!

We spoke with the Head of Data Analytics at Nova Credit and Experian experts to explore the topic of DEI and how to break down financial inclusion barriers.

Incorporating artificial intelligence and machine learning into your business strategy can improve decisioning and reduce risk. Read more.

Consumers continue to manage credit well and the average credit score climbed seven points since 2020 to 695, the highest point in more than 13 years.

Learn how to maximize your collections efforts while reducing costs, avoiding reputational damage and fines, and improving overall engagement.

As last year’s high-volume mortgage environment wanes, lenders are shifting focus to address another set of challenges.

The right technology can help your business maintain TCPA compliance through data scrubbing, phone type indicators, phone number scoring, and more.

Experian discussed the benefits of FCRA data and ways this data can ease credit access for “invisible” consumers in a recent webinar hosted by AFSA.

As lenders and consumers emerge from the pandemic, predicting the attributes of the “new normal” will be difficult.