A staggering 40% of North American consumers have used their smartphones to make payments at merchant locations, according to an Accenture survey of 4,000 consumers in the U.S. and Canada.
The lofty percentage is significantly higher than 16% reported in a similar survey two years ago.
Millennials and high-income consumers–household income of at least $150,000–are the most avid adopters, with 52% of Millennials and 55% of high-income consumers having used their phones as a mobile payment device, the survey shows.
“Digital payment technologies are maturing and we have seen more aggressive market entrants that are providing consumers with convenient and secure digital options for making payments,” Matthew Friend, managing director and head of Accenture Payment Services in North America, said in a release. “Our research shows that Millennials are most likely of any age group to use a smartphone to make a mobile payment, and are in fact driving the adoption of new payments technologies.”
For consumers who have never used their mobile phone as a payment device in a merchant location (60%), the two most cited reasons preventing them from doing so were security concerns (57%) and privacy concerns (45%).
The survey found that 8% of respondents use digital currencies to complete a payment transaction at least weekly, and 18% expect they will use digital currencies at least weekly by 2020.
Digital currencies were defined as a form of currency or medium of exchange that is electronically created and stored. The primary reasons cited for embracing digital currencies is for protection of personal identity (46%) and lower transaction costs (43%).
Millennials and high-income consumers are expected to drive the use of digital currencies. Today, 13% of Millennials and 19% of high-income respondents are using digital currencies to make a payment at least weekly, and 26% of Millennials and 32% of high-income consumers expect to do so by 2020.
Lack of information remains the number one reason why people today do not use digital currencies, with 38% of consumers not interested in using digital currencies saying they need more information before they will consider it.
“Our survey reveals that customers are increasingly embracing alternative forms of payment,” Dave Edmondson, senior managing director and head of Accenture’s Banking practice in North America, said. “As payments technologies continue to evolve, financial institutions will need to upgrade their middle- and back-office legacy systems in order to support customer demand for faster, more real-time digital payments.”
The survey also indicates that, by 2020, many traditional payment forms will decrease. Today, 66% of respondents said they make cash transactions, 59% use debit cards and 55% use credit cards at least weekly to make a payment. When asked how they anticipate using these payment instruments in 2020, the respondents indicated they would decrease usage of cash, debit cards, and credit cards as payment instruments at least weekly by 12 percentage points, six percentage points and three percent points, respectively.
“By 2020, we anticipate the first decline in credit card usage in more than five decades and in debit card usage since they were introduced,” Friend said. “While Millennials and higher income consumers are paving the way for increased mobile payments and the usage of digital currencies, we expect the other age groups to increasingly embrace these payment methods as more consumer friendly and secure solutions become available in addition to merchants adopting these technologies.”