Are physical wallets being usurped by mobile wallets?

A recent study by card issuing platform Marqeta has found that 61% of consumers feel confident enough with contactless payments to leave their wallet at home.

The company released its 2022 State of Consumer Money Movement report that looked at consumer payment, banking and shopping preferences, showing that digital adoption is on the rise. The firm surveyed 4,000 consumers across three different continents, including 1,000 UK respondents.

Marqeta found that of those who were comfortable to pay with a mobile wallet, the 61% figure climbed to 77% amongst Gen Z respondents. The study outlined in other key ways the growing popularity of contactless and mobile payments – with 96% of UK consumers stating they had used contactless in the last year. As a result of this, 42% of UK-based respondents said they couldn’t remember their PIN anymore because it had been that long since they used anything except contactless. This figure grew to 54% amongst Zoomers.

Other findings included 46% of UK consumers stating they could count ‘on their hands’ how many times they’ve used a bank branch in their lifetime, while 50% of 18-24s said the idea of going into a physical bank is ‘completely backward and alien to them’.

Almost two thirds – 63% – of respondents said they believe cash will eventually disappear altogether, while 59% said they think this will happen in the next five to ten years. Up to 33% said it would have no impact on their lives if all physical bank branches were to close tomorrow. Six in ten consumers said they have been with their bank for more than six years, with 38% staying loyal to their bank for over a decade.

It was found that payment preferences during the pandemic have also changed during the pandemic. Up to 77% said they have used a mobile wallet in the last year, with 87% agreeing they are easier to use than they would have imagined and 83% saying they’re able to make purchases with their mobile wallet everywhere they want to. Also, 64% prefer to use their mobile phone to pay as it has more built-in security features.

Consumers are also open to cryptocurrency, with 26% of UK consumers stating they now owned crypto, with 82% of these keen to use it like a debit card at the point of sale.

Consumers are also open to innovation in cryptocurrency as a payment method, with more than a quarter (26%) of UK consumers surveyed now owning crypto, and 82% of these keen to use it like a debit card at the point of sale.

Marqeta European strategy director Anna Porra said, “The age of the bulky physical wallet might be moving behind into the rearview, confidence in mobile wallets is growing, and people feel increasingly comfortable that their mobile phone can handle their payment needs and not leave them stranded. While the shift to digital payments was born out of necessity, many are happy to completely step away from in-person banking.

“And it’s easy to see why – with long queues, inconvenient opening hours, and hygiene concerns particularly during the pandemic creating the perfect storm to shift consumer appetite away from in-person experiences that weren’t very popular to begin with. With physical branches closing at unprecedented rates, banks must ensure they adapt their products and services to operate online seamlessly.”

She continued, “While the pandemic was the catalyst for the shift to contactless and mobile wallets, it is the convenience, security, and speed of these payment options that have made them sticky. As contactless limits continue to rise and more merchants welcoming contactless payments, banks and FinTechs must work harder than ever to provide a smooth digital experience for their customers that provides them with security, giving consumers the digital convenience they crave.”

Citi Commercial Cards recently selected the tokenisation-as-a-service capabilities of Marqeta to facilitate the provisioning of cards into mobile wallets.

Copyright © 2022 FinTech Global

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