As consumers become increasingly price-conscious and expect greater payment choices, over 56 per cent have also changed their spending habits from this time last year, payment processor and digital wallet provider Paysafe has revealed.
The latest Paysafe report, ‘Inside the Wallet: How consumers are spending and saving in 2024’, reveals that 43 per cent of consumers have abandoned their online shopping cart if a business didn’t offer their payment method of choice.
Despite this, consumers remain worried about losing their ability to pay with cash (63 per cent) as retailers increasingly adopt cashless policies. Another 44 per cent indicated that they want to be able to buy goods or services online and pay for them in cash at a local store.
Payment security also emerged as an important factor for consumers, as 64 per cent said it is an important factor they consider when deciding how to purchase online. Meanwhile, two-thirds of consumers reported feeling better buying from a business if they know there are security steps in place to protect their data or if they see a payment option they recognise.
Bob Legters, SVP of product at Paysafe, commented: “Consumers are comparison shopping more than ever, not only to find the best deal but the best payment experience that delivers choices, security, and speed, and keeps them coming back. As consumers’ financial situations and priorities shift, businesses need payment partners that have a track record of offering innovative payment options that attract a wide pool of consumers—from younger to older and every age in between.”
The report also found that debit cards (53 per cent) are the top payment method being used more frequently this year vs last year, but bank transfers (39 per cent), credit cards (33 per cent), and digital wallets (32 per cent) have also increased in popularity.
Trying out new ways to pay
While these payment options are currently dominating, consumers haven’t stopped trying out other options. In fact, 58 per cent of consumers have made an online purchase through social media, with 38 per cent doing so multiple times a year. Thirty-two per cent now also use a wearable device, such as a smartwatch, to pay.
But what is pushing people to change their payment habits? According to Paysafe, 56 per cent of respondents say that they are earning just enough to cover their monthly expenses, while 25 per cent are not earning enough money to cover their monthly expenses, with the figure rising to 33 per cent for Gen Z.
With many consumers living paycheck to paycheck, the opportunity to save has decreased, with 39 per cent saving less than six per cent of their income each month and 14 per cent not saving at all (down from 18 per cent in Paysafe’s 2023 research).
This fact can be attributed to an increase in the cost of living, with respondents reporting that they’re spending more on everyday necessities like groceries (66 per cent), utilities (57 per cent) and essential consumer goods (51 per cent).
Remaining (mainly) optimistic
While most respondents anticipate an increase in their income over the next five to 10 years – 49 per cent believe their income will rise by 10 per cent or less, and 12 per cent say they don’t expect any increase. Despite having limited disposable income early in their careers, Gen Z and Millennials were hopeful about their future earning potential, anticipating increases of 20 per cent and 18 per cent respectively.
Paysafe’s data indicates a sense of optimism among consumers, with 60 per cent of respondents (and 78 per cent of Gen Z) expressing confidence about their financial future, and planning towards this.
Twenty-seven per cent are saving to buy their first home. This rises to 48 per cent of Gen Z respondents, who expect to purchase their first home before the age of 32. Gen Z’s positive outlook extends to the belief that they can achieve another major milestone early in life – nearly half (49 per cent) expect to retire before the age of 61.
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