As the holiday season continues and the frequency of payments spikes, understanding how and where consumers use different payment devices is invaluable to both merchants and issuers alike, helping assist in customer service, authorization, and fraud strategies. In this three part blog series, Javelin identifies key spending metrics for the in-store, online, and mobile channels, as well as methods of improving the frequency and value of a payment method with practical methods for issuers and merchants to determine how to balance their payment strategy this holiday season and through 2019.
Consumer payment preference is shaped by many factors, with in-store retailers having the greatest influence over the payment channel selected. The innovation many retailers are initiating this year are geared towards driving consumers to pay quickly and with specific payment methods. Having payment options enables consumers to quickly make purchases without the need to stand in line. As new payment methods are implemented, Javelin Strategy & Research will continue to assess how consumer payment preferences change in 2019.
In store purchases remain the most frequent method of shopping at more than twice the rate of e-commerce and mobile purchases. Issuers and merchants should provide consumers with immersive experiences in store to make shopping an experience which evokes emotions. Many financial institutions offer discounts at participating merchants, yet consumer adoption of discounts has lagged. By tailoring the offer to an experience – after hours access with personal shopping assistance, additional rewards or discounts with same store transactions, and free gift wrapping (could be at the financial institution branch to drive greater traffic) can all be ways to increase payment utilization of credit and debit during the holidays.
Consumers spend more money, and are more open to being influenced in store for purchases when they are using a credit card. To increase purchase volume, financial institutions can focus helping consumers understand what is available to spend in their debit account to make them feel more comfortable with a larger purchase. Improving dashboards to keep a budget, show progress, identify where savings can be found, can reduce the anxiety a shopper may have when trying to quickly determine if they can afford adding to their purchase1.
Cash is not going away but it is used less frequently. The smaller ticket value and the lower frequency of usage indicates that consumers are still making smaller purchases with cash but use other payment methods. Ensuring that customers know where ATMs are located, if digital wallets are supported, or if gift cards are available at a branch for purchase can help streamline the holiday season for cash usage.
1September 2018 report Chase’s Finn App Aims to Make Financial Fitness a Lifestyle.