Consumers are looking for convenient, immediate, and frictionless payment experiences that simplify everyday tasks, transactions, and routines. As a result, more and more consumers are turning to mobile payments.
MOBILE PAYMENT USE IS ON THE RISE
95 percent of Americans own mobile phones and approximately 80 percent of those are smartphones, according to Pew Research. In 2019, it is expected that nearly 62 million Americans will make payments on their mobile devices. By 2021, sales on mobile devices
are expected to account for 54 percent of all e-commerce sales.
1 in 4 smartphone owners use universal mobile payments, such as Samsung Pay and Google Pay, to pay online or in-store (eMarketer). 3 in 10 smartphone owners use service-oriented apps, such as Uber or Fandango, to make mobile payments in-app for on-demand
services. Consumers that are mobile-enabled and mobile-oriented are looking for a payment device that links to their mobile wallets. These consumers, who rank convenience as the leading reason to shop digitally, are turning to prepaid cards.
PREPAID: THE NEXT GENERATION OF PAYMENTS
Among prepaid card purchasers, 84 percent are smartphone owners. According to data from Mercator Advisory Group, 4 in 5 consumers who paid for goods and services with their mobile device bought a prepaid card within the previous year.
Consumers who use mobile payments are more than twice as likely than average to buy virtual prepaid cards and receive them through a mobile app. Virtual cards offer instant delivery and allow consumers immediate access to funds, which they will use to spend
Leading the charge of prepaid use are Millennials and Generation Z, thanks to their ubiquitous use of smartphones and the desire for digital shopping experiences. 68 percent of 18-to-24-year-olds (Generation Z) purchased prepaid cards in 2018. Young adults
and mobile-enabled payers are more likely to redeem prepaid gift cards online, as opposed to in-store. In 2018, 50 percent of in-store sales were influenced by digital. By 2022, that number is expected to grow to 58 percent.
According to further data from Mercator, 76 percent of mobile payments users opt to redeem prepaid gift cards online. Among the younger generations and mobile-enabled, the smartphone the desired point of contact for both prepaid purchases and redemption
transactions. 65 percent of American consumers made at least one remote order and pickup purchase via browser, mobile device or merchant app in the last 12 months. 95 percent of consumers ages 18 to 34 reported this purchase behaviour in the last year.
DIGITAL COMMERCE IS GROWING, AND SO TOO ARE CUSTOMER DEMANDS
Juniper Research forecasts the total number of digital commerce transactions will increase from 45.3 billion in 2018 to 92.8 billion in 2022. It is estimated that digital commerce volume will increase from $1.9 trillion in 2018 to $3.1 trillion in 2022.
Consumers are looking for savings, convenience, and rewards for their brand loyalty, according to a 2018 Javelin Strategy report. Mobile wallet apps that provide flexibility and incentives to consumers will separate themselves from the competition. Companies
that enhance their payment capabilities to cater to mobile-enabled consumers will reap the benefits and see a rise in business sales. Prepaid is often the preferred payment method for consumers looking to build rewards in mobile wallets.