Cards, Cash, and Checks

Mobile and Contactless

New Competitors

Key Finding from the Report:

Results from SYNERGISTICS 2014 study, Evaluating the Consumer Payments Market, found that more than seven in ten consumers view chip cards as an improvement over their current cards.  With chip/EMV cards now being rolled out by issuers, how has this perception changed, if at all?

F238 Prop Graphic

Highlights of the Study

This study examines consumer payment behavior at the point of sale. Current usage of various payment methods and consumer reaction to innovative payment options and technology are assessed.

National Internet Survey – 1,000 consumers age 18 or older.

Key Dates

September 25, 2015 — Charter fee/Intro pricing ends.

September 25, 2015 — Final acceptance of comments on questionnaire.

December 2015 — Project Report available.

Strategic Questions

  • Do attitudinal or perceptual factors influence payment choice? Do problems experienced at the point of sale – such as waiting time or confusion in using checkout terminals – have an impact?  Do consumers see advances in payment technology – such as chip cards or contactless mobile payments – as really being improvements?
  • What factors or motivations at the point of sale influence the choice of a payment method – including location, size of the purchase, available rewards, and security and privacy? Is cash still seen as most appropriate for certain purposes?  Do proprietary credit cards have an advantage over general-purpose cards in certain situations?
  • Are consumers adopting self-service modes of payment at the point of sale – such as self-checkout at retail stores, buying movie or event tickets at a self-service kiosk, or paying a restaurant check at an on-table terminal? What are the implications of this behavior for payment providers?
  • What is the consumer reaction to “real time” marketing messages and promotions delivered via mobile devices at the point of sale using GPS or location-based technology? What will be the role for “wearable” technology such as fitness trackers or smart watches?
  • How will consumers’ experiences with and perceptions of chip cards impact positioning and ongoing introduction of this product? How does this affect consumers’ usage of or receptivity to contactless payment cards or contactless mobile payments?
  • What are consumers’ perceptions of the relative security of various payment methods at the point of sale and how should providers address these concerns?
  • Does payment behavior at the point of sale vary among consumer segments?  Which groups – in terms of household demographics, current payment behavior, and other identifiers – have the most potential for adopting new payment methods and technologies?

Research Issues

  • A growing number of payment alternatives, technologies, and players are potentially bringing about an expanded array of choices for consumers when making a payment at the point of sale.  Contactless payments for debit and credit cards are gaining traction after somewhat limited availability for a number of years.  Paralleling this are ongoing developments in contactless payments made with mobile phones.  Many competing players and technologies are involved in mobile contactless payments, making it uncertain what systems may emerge and be widely adopted.  It is yet to be seen how the introduction of chip technology for all types of payment cards may impact contactless payment methods.
  • Cash, despite many proclamations of its demise, remains a very popular and preferred payment method among many consumers.  Recent news suggests that check writing at the point of sale may be a narrowing option, as many retailers and other organizations announce they will no longer accept checks.  Addressing the needs of small customer segments that prefer checks must be a priority for providers.
  • Banks have traditionally been the primary intermediary in the payments area and will certainly always have a role.  Any number of third parties – such as PayPal, Apple Pay and Google Wallet – could, however, be on the verge of taking a major role in the payments system. Recently, several retailers banded together to offer the mobile payment service CurrentC.  Clearly assessing consumers’ preferences for payment at the point of sale is critical to success in the increasingly competitive – and complex – payments market.  This study examines consumer payment behavior at the point of sale.  Experience with various payment options and reaction to innovative payment alternatives are examined. [F238]