Study finds growing use of digital payments

To track consumer adoption, use, and attitudes toward digital payments, the study surveyed more than 9,000 US consumers who are aware of P2P, own smartphones and have accessed online or mobile banking.

The study found that adoption and usage of digital person-to-person (P2P) payments are high among all generations, with consumers pointing to trust in friends and family and trust in their financial institutions as the primary reasons for engaging in a digital payment. Boomers ranked trust in financial institutions as the most important influence on engaging in a digital payment, while Millennials and Generation X ranked recommendations from friends/family/peers as their primary influence.

Although digital P2P adoption first caught on with Millennials, adoption of P2P services continue to be popular among all generations. Of those surveyed, more than 75% of Millennials have used online or mobile P2P payments. Generation X is a close second at 69%, and Baby Boomers are closing in at 51%.

Those who already have P2P are using it frequently, indicating P2P is becoming part of routine banking behavior. Forty-nine percent of Millennials use P2P payment services at least once a week, followed by 42% of Generation X and 32% of Boomers.

Sixty-eight percent of Millennials and 66% of Generation X identified recommendations from friends and family referrals as the primary reason for trying a P2P payments service. For Boomers, trust in financial institutions was cited as the key reason for changing payments behavior from physical cash and checks to digital P2P payments. A service being offered through a financial institution I use was found to be a significant motivator for using digital P2P payments for the first time amongst older users, with 70% of Boomers reporting they used a P2P service because it was offered by their bank, versus 49% of Generation X and 35% of Millennials. The findings suggest that consumers want a secure, easy to use service right from their online banking and/or mobile banking app that is recommended by friends and family who use the service.

Security was also identified as a very important feature for an ideal P2P service across all generations. Boomers ranked it the number one feature, while Gen X placed it third and Millennials fifth out of thirteen choices, such as having social features or app reviews. Consumers cited accessing financial information online outside of their financial institutions platforms as one of the top barriers to using digital payment services.

After reviewing the memo fields used on transactions across the Zelle Network, it was determined that the top reasons for use in banking apps over a six-month period were rent, meals, splitting utility bills, and gifting.

The study was based upon a twenty-minute self-contained digital survey that was administered online in April 2018, to a total of 9,229 consumers ages 18-65, with a high school degree or higher.

Participants were aware of P2P, owned a smartphone, sent or received money by any means, and used online or mobile banking in the past six months. Interviews were conducted in two phases: an initial phase that included baseline metrics from surveyed online US consumers, and a post-qualifying phase including detailed behavior, and attitudinal data.