ECONOMY & WORK
MONEY 101
NEWS
PERSONAL FINANCE
NET WORTH
About Us Contact Us Privacy Policy Terms of Use DMCA Opt-out of personalized ads
© Copyright 2023 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
MARKETREALIST.COM / PERSONAL FINANCE

Why US Consumers Are Switching to Digital Wallets to Tackle The Cost of Living Crisis

The use of mobile wallets across demographics has risen by 11% between the third quarter of 2022 and the first quarter of 2023.
PUBLISHED FEB 29, 2024
Cover Image Source: Digital Wallet |  Pexels |  Ivan Samkov
Cover Image Source: Digital Wallet | Pexels | Ivan Samkov

There's no denying that with the rise of e-commerce experiences, e-wallets have made it easy for consumers to make purchases. Tech giants like Google, Apple, and Samsung have already invested in proper digital solutions enabling consumers to pay without swiping a card.  According to a report by Worldwide Collaboration, the use of mobile wallets across demographics has risen by 11% between the third quarter of 2022 and the first quarter of 2023. While the number is on the rise, there are still a few reasons why customers don't want to use digital wallets. One such reason is that customers have to pay either a flat fee, a percentage of the bill or some combination of both to use digital wallets like PayPal. However, the general sentiment towards digital wallets is positive.

PayPal Icon | Pexels | Brett Jordan
PayPal Icon | Pexels | Brett Jordan

The growing cost of living has resulted in customers switching to digital wallets. Bruce Richardson, a mobile strategy consultant at SAP Emarsys says, "Many have turned to digital wallets as a result; 50 percent of UK shoppers agreed that there was ‘no need for a physical wallet now that I have a mobile wallet'," via The Fintech Times. "To cut through these concerns, brands need to make customers feel that they’re making specific efforts to drive down cost – and to tie that sentiment back to their brand. Through digital wallets, they’re able to their customers in tackling the cost-of-living crisis – delivering personalized offers and convenient experiences directly into that shopper’s pocket," he adds.

This cost of living has resulted in consumers seeking cost-effective alternatives for financial transactions. According to Richardson, the year 2024 is pivotal for this sector. "Projections indicate a remarkable 77 percent increase in digital wallet transactions, exceeding $ 16 trillion by 2028," he said. 

Bob Legters, SVP of consumer products at Paysafe, said that around 69% of consumers who changed their payment habits because of the rising cost of living were using digital wallets more regularly as compared to the year prior. He also talked about how offering consumers financial insights into their spending accelerated the use of digital payment modes. "By offering these insights, digital wallets can help consumers stay on budget and make their money stretch further – a boon as discretionary spending tightens," he added. 



 

Another survey by Forbes Advisor uncovers how Americans are using their digital wallets. The survey revealed that more than half of Americans were using digital wallet apps and services. The survey also revealed that 69% of respondents were using PayPal, making it the most popular digital wallet in the US. The survey also highlighted how digital wallets are now eclipsing traditional payment methods. Another interesting revelation is that customers were equally likely to pay through their digital wallets for both a small payment and a large purchase. 



 

It's safe to say the consumer preference for digital payments is growing. While this method is the most convenient, it's important to note that it has also been seen that consumers who used digital wallets were more likely to lose track of their spending and blow through their budgets. Many businesses have also noticed the same thing. "...People tend to spend more with digital wallets," said Simas Simanauskas, chief business officer at financial platform ConnectPay. "This means that if you can drive more spending in an environment where the cost of living keeps rising while decreasing your operational costs — then you have your golden goose," said Simanauskas.

MORE ON MARKET REALIST
Each of the “T206 Ty Cobb” cards was worth at least $150,000, putting the total full value of the find somewhere above $1 million.
14 hours ago
At the same time, California has lost its charm despite good weather and spectacular landscapes.
1 day ago
Robert Reich, an admitted Baby Boomer, and former Secretary of Labor in the Clinton Administration took to the Internet to explain this discrepancy.
2 days ago
The idea was appreciated by a lot of viewers while some even warned French about adverse effects.
2 days ago
The list includes a lot of everyday items in the grocery baskets of unsuspecting American households.
3 days ago
There's also a list of models that are known to retain a good resale value for a longer time.
4 days ago
Amazon's housing units come with both sun protection as well as rain and moisture resistance.
5 days ago
Although the innovative charging system can help EV owners save a lot of money, its installation costs are high.
Oct 24, 2024
His success in the legal field has inspired him to give back and support programs that shaped his early career.
Oct 24, 2024
"It was the greatest thing I have ever done for my health and bank account," she added.
Oct 24, 2024
She has considered every possibility from natural calamities to civil unrest while preparing.
Oct 19, 2024
The man later clarified that his purpose wasn't to make money at all.
Oct 19, 2024
He got offers within minutes from collectors who were ready to pay whatever he asked for.
Oct 19, 2024
The student also began flashing the cash to her closest friends and began drinking expensive whisky with them.
Oct 13, 2024
The TikTok content creator and her friend guessed that the price would be higher than average but still got it wrong.
Oct 12, 2024
Costco has introduced the measures along with the first increase in its membership fees since 2017.
Oct 10, 2024
The Maserati driving kid has shared several videos on TikTok showing off her money collections.
Oct 2, 2024
There are several reasons why it only costs $10,000 to open a Chick-fil-A location. Keep reading to learn about all the details.
Sep 29, 2024
Here are three key learnings from the radio host, bestselling author, and personal finance expert's money secrets.
Sep 26, 2024
Buying a car is a major financial investment and that's why you should know how to negotiate a car loan before you go to the dealership.
Sep 23, 2024