Millennials and high-income consumers are driving the adoption of new payment techniques, even as lack of information remains the chief reason many people do not use digital currencies, the survey found. The results show that digital payment technologies are gradually winning acceptance as connected devices provide more opportunity for engagement and commerce before, during and after a purchase.

“Now that payments are both digital and mobile, marketers have a once-in-a-lifetime opportunity to influence shoppers in ways that weren’t possible even a year ago,” said Alex Campbell, co-founder and chief innovation officer, Vibes, Chicago. “The payment is a step in the customer journey but before now, it was one of the only steps that wasn’t mobile.  Now the entire customer journey is mobile.

“Marketers who realize this quickly and, more importantly, act quickly can capture significant market share at the expense of their competitors,” he said.

4,000 respondents
Accenture’s survey, conducted in August, looked at the payment behaviors of 4,000 respondents, including 3,400 from the United States and 600 from Canada, with an equal percentage of men and women.

By 2020, digital-currency use is expected to increase 10 percentage points while cash transactions fall 12 percentage points, according to the Accenture survey.

Millennials and high-income consumers – households with an income of at least $150,000 – are the most avid adopters, with 52 percent of millennials and 55 percent of high-income consumers having used their phones as a mobile payment device.

Of the 60 percent of consumers who have never used their mobile phone as a payment device in a merchant location, 57 percent said security concerns prevented them from doing so while 45 percent pointed to privacy concerns.

The study found that eight percent of respondents use digital currencies to complete a payment transaction at least weekly. Eighteen percent expect they will use digital currencies at least weekly by 2020.

Today, 13 percent of millennials and 19 percent of high-income respondents use digital currencies to make a payment at least weekly. Twenty-six percent of millennials and 32 percent of high-income consumers expect to do so by 2020.

Thirty-eight percent said they need more information before they will consider using digital technology. The survey also indicates that by 2020 many traditional payment forms will decrease.

Today, 66 percent of respondents said they make cash transactions, 59 percent use debit cards and 55 percent 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 weekly usage of cash by 12 percentage points, debit cards by six points and credit cards by three points.

Respondents who use phones to make payments said they would do so more frequently if they could scan a product for purchase immediately (71 percent), eliminating the check-out procedure.

Sixty-nine percent said they would use pay-by-phone more frequently if they could use it to track receipts.

For 67 percent, the key to ramping up their phone payments was receiving valued customer treatment, such as a separate line to speed up payment.

Sixty-six percent said being able to scan a product and learn more about it through customer reviews and product or price comparisons, would prompt them to pay by phone more often.

Respondents who do not use their smartphones to make payments would consider doing so if they were offered rewards points (54 percent), discount pricing based on past usage (53 percent), or could store all receipts in a secure database (52 percent).

Phones are playing a bigger role in mobile payments as the technology gradually wins acceptance.

McDonald’s is extending nationwide its partnership with mobile payments platform Softcard in an effort to push sales and offer more convenience to consumers.

The partnership is launching nationwide on more than 80 mobile devices across Verizon Wireless, AT&T and T-Mobile networks. McDonald’s also accepts Apple Pay, pointing to how the chain is looking to reach both Android and Apple users via offerings that will make it easier for them to pay for their meals.

Winning acceptance
It is not clear yet to what degree shopping and payment experiences need to evolve as connected devices provide more opportunity for engagement and commerce before, during and after a purchase.

“The linkage between mobile payments and loyalty is a really big deal,” Vibes’ Mr. Campbell said.  “Now that payments happen at the device level, marketers need to rethink what a loyalty program actually looks like. You don’t have a barrier of having to force consumers to carry around physical objects like cards or enter phone numbers at check out.

“That’s great on its own, but now that loyalty has been digitized, it presents an entirely new world for how marketers use loyalty as a tool,” he said.

Final Take
Michael Barris is staff reporter on Mobile Commerce Daily, New York.