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gets personal
How to remain relevant as
consumers seek control
In the aftermath of the COVID-19 crisis,
the tempo of change in consumer
behaviors and expectations has hastened.
Geopolitical shifts, accelerating digitalization
and significant economic turbulence are
reshaping how people pay and move
their money. At the same time, the friction-free
experiences offered by social and e-commerce
platforms are setting new benchmarks for
consumer payments. With economic volatility
growing, consumers are seeking more control
over their payments choices.
Staying
anytime, anyhow. However, the payments
landscape is becoming increasingly complex
ahead in an
and fragmented with innovative digital payment
providers taking a much larger share of wallet
Executive
novel ways to pay. Indeed, a third of higher interest rate environment.
An Accenture survey of 16,000 consumers that use credit cards as
summary:
customers in 13 countries their primary payment method for Leading banks will not only enhance
spanning Asia, Europe, Latin America in-person shopping are considering their relevance and drive revenues
Capitalize on
and North America found that more or are willing to switch to alternative from new products, but also create
than half of all consumers have payment methods. Half of them plan opportunities to offer value-added
consumer
adopted digital payment methods to switch to non-interest-charging services and revenues that cement
such as digital wallets, many of methods as they seek to reduce customer trust and drive higher levels
which displace banks’ brands debt interest. of engagement. New market entrants
demand from the customer experience.
Traditional payments methods still An Accenture analysis suggests that
such as fintechs and bigtechs, too,
can unlock opportunities to drive
for trusted, dominate most markets, but next-gen
alternatives are rapidly gaining share.
card-issuing banks that take a timid
approach to payments innovation
revenue growth and closer
customer relationships through
friction-free Our survey found that consumers
could lose out on 4.6% of total global
card and online payments revenues,
frictionless payments.
Cash, Card, Check Cash, Card, Check, E-commerce, Cash, Card, Check, E-commerce,
Digital Wallet, Account-to-Account, Digital Wallet, Account-to-Account,
BNPL, Crypto BNPL, Crypto, Biometric,
Machine-to-Machine, Metaverse
5 Payments Gets Personal | The future is digital, even for face-to-face payments
Figure 2. Cash is still dominant, but digital wallet adoption is soaring.
Q: Which of the following payment methods do you use at least 5 times per month?
Global:
43% 45%
41%
35%
31%
28%
26%
22%
17%
13% 12%
10% 9% 8%
6% 5% 4% 6%
1%
Cash Debit card Digital Wallet Credit card Bank transfer Direct debit A2A Apps BNPL
6 Payments Gets Personal | The future is digital, even for face-to-face payments
Adoption of next-generation payment methods varies by region
due to regulation and competition. Asia-Pacific and Latin America
are early adopters, while North American and European consumers
prefer cash, card and bank transfers.
High
Usage of Traditional Payment Methods
North
America
Latin
America
Europe
Asia-Pacific
7 Payments Gets Personal | The future is digital, even for face-to-face payments
Figure 4. Credit card users switching in-person payment method due to Macroeconomic conditions, especially inflation and rising interest rates,
inflation and rising rates. play a significant role in consumer payments preference. Nearly a third
(31%) of respondents who use credit cards as their primary payments
Q: Would a significant increase in the cost of living cause you to switch method for in-person shopping are considering switching to other
to another payment method for in-person shopping? payment methods. Half of these are looking to reduce their interest
If so, what would be your preferred method? expenses by choosing debit card, cash, BNPL or prepaid card. The other
Consumers who prefer credit cards Preferred alternative half are planning to switch because they prefer the convenience or control
when shopping in-person paymentalternative
methods of banking apps, digital wallets or A2A apps for payments.
Consumers who prefer credit cards Preferred
when shopping in-person payment methods
8 Payments Gets Personal | The future is digital, even for face-to-face payments
The channel and size of the transaction
influence how consumers choose to pay
Figure 5. Next-gen payments as the primary in-person method are likely
to grow in three years.
Q: Do you currently prefer to use traditional or next-generation payment methods? Our survey found that next-generation payments have taken off in the
Which do you expect to be using in three years’ time? online world—20% of respondents use one or more next-gen methods
for e-commerce, especially for small purchases. But a similar trend is
affecting the real world—9% of consumers use these methods as their
Next-gen By 2025 primary way to pay for face-to-face transactions. This number is expected
Methods 20% to double in the next three years.
9% Today
In most territories, consumers tend to prefer to use cash and debit cards for
smaller in-person purchases such as groceries, clothes and transportation.
A higher percentage of consumers in Asia-Pacific use digital wallets for
small purchases than in the other regions. For larger face-to-face purchases
such as appliances and travel, consumers tend to use cards, especially
Traditional credit cards.
Methods Next-gen payment methods are widely used for online purchases,
91%
especially for small-ticket items in Europe and Asia-Pacific. But cards are
80%
still preferred by the majority of consumers in the US.
Note: Traditional payment methods include cash, cards, check and bank transfers, while next-generation
payment methods include digital wallets, account-to-account payments, BNPL and crypto payments.
9 Payments Gets Personal | The future is digital, even for face-to-face payments
Figure 6. Top primary payment methods for small-ticket items. For small-ticket in-person
purchases, cash and debit cards are
Credit
Credit
23%
Card
used in most regions, while Asia-
32%
Card Cash 38% Pacific has a higher usage of digital
Cash 32% Direct
Direct
15%
Debit wallets (18%). Next-gen payments
24% Debit 34%
Debit Debit Card Debit
are widely used across most regions
33% 25%
Card
23%
Debit Credit Card for small online purchases,
Card 17%
Credit
27%
Card Digital especially in Europe and Asia-
Card 16%
9%
Digital Digital Wallet Pacific, where digital wallets
Wallet 4%
Digital
2%
Wallet
11%
Bank account for 16% and 22%
Wallet Bank Transfer
7% North A2A Apps 2%
respectively.
Transfer
A2A Apps 1%
America 2% A2A Apps
1% A2A Apps
Europe Other 5%
Other 4% 8% Other
3% Other
Credit
Credit 15%
28% Card
Card Cash 36%
Cash 46% Direct
Direct 23%
Debit
22%
Debit Latin Asia-Pacific Debit 21%
Debit
28% Card
Card
16%
Debit America 14%
Debit
Card
Card Credit
Credit 12%
16% Card Digital
Card Digital 22%
8% Digital Wallet
Digital Wallet 18%
1% Wallet Bank
Wallet Bank 17%
18% Transfer
Transfer A2A Apps 2%
A2A Apps 1%
4% A2A Apps
3% A2A Apps
Other 11%
Other 6%
In-person Online 6% Other
4% Other
Credit
Credit 25%
50% Card
Card Cash 8%
Cash 12% Direct
Direct 19%
Debit
15%
Debit Latin Asia-Pacific Debit 28%
Debit
25% Card
Card
11%
Debit America 19%
Debit
Card
Card Credit
Credit 28%
52% Card Digital
Card Digital 13%
5% Digital Wallet
Digital Wallet 11%
2% Wallet Bank
Wallet Bank 12%
11% Transfer
Transfer A2A Apps 2%
A2A Apps 1%
4% A2A Apps
3% A2A Apps
Other 22%
Other 8%
In-person Online 8% Other
5% Other
Consumers who participated in our survey are already making more use
of digital wallets than credit cards. More than half (56%) of respondents
12 Payments Gets Personal | The future is digital, even for face-to-face payments
Major digital wallet players are continuously expanding their solutions to be
more competitive. PayPal, for example, has come to market with a BNPL solution. In the third
quarter of 2022, it processed nearly $5 billion in BNPL volume, up 157% from the prior year.1
Fintechs like Revolut are also driving innovation. Revolut offers a single app that enables
users to exchange currencies, send money through social networks and spend with
a multi-currency card everywhere Mastercard is accepted.
The pioneers in digital wallets are continuing to innovate, adding new products The early movers managed to secure a strong foothold in the markets
and valued services to their wallets in an effort to grow their share of their they targeted (Figure 8). Except for PayPal, few players have established
customers’ spend. Apple, for instance, has added a digital card to Apple Pay. themselves as major contenders in more than one or two markets.
Apple Pay is also a contender in the BNPL market and has rolled out tap-to-pay Today, PayPal is used by 60% of respondents in Germany, 51% in
features to compete with other contactless payment providers. Mexico and 42% in Australia.
13 Payments Gets Personal | The future is digital, even for face-to-face payments
Figure 8. The share of consumers who use the top three next-generation payment methods in each market at least five times a month.
UK
PayPal 46%, Sweden
Canada Apple Pay 17%, Swish 51%,
PayPal 28%, Google Pay 10% PayPal 27%,
Apple Pay 13%, Klarna 23%
Interac Online 10%
Germany
USA France PayPal 60%,
PayPal 35%, PayPal 39%, Klarna 16%,
Apple Pay 12%, Apple Pay 9%, Apple Pay 7% China
Bigtechs Venmo 11% Google Pay 4% WeChat Pay 82%,
Alipay 79%,
and fintechs
PayPal 6%
Mexico
have edged
PayPal 51%, Italy
Mercado 22%, PayPal 50%,
Google Pay 8%
Australia
ahead in
Apple Pay 6%,
Google Pay 6% PayPal 42%,
Brazil Apple Pay 13%,
10%
This means there is a higher risk of fraud than with traditional payments.
Global: Despite high-profile social engineering and phishing scams on A2A services,
consumers are willing to take the risk because A2A payments are fast
and convenient. From a merchant perspective, A2A transaction fees are
Europe
35% lower than those of cards.
North America
Asia-Pacific A trend to watch for is A2A enabling underbanked nations to improve
12%
Latin America financial inclusion, leapfrog cards and move directly to digital wallets for the
Europe mass market. Consider the high levels of A2A usage in Latin America,
6%
5% America
North where cash was traditionally king because of the high costs associated
Asia-Pacific with cards and alternative payment methods.
12%
Latin America
Source: Accenture Payments Survey, 2022
6%
5%
In 2020 the Central Bank of Brazil launched
What is A2A? an A2A payments system called PIX.2
Merchant transaction fees for PIX are only 0.22%
Account-to-account payment involves moving money directly compared to 1% for debit cards and 2.2% for
from one account to another without the need for additional credit cards. Two years later, 69% of Brazilians
intermediaries or payment instruments such as cards. report that they use PIX at least five times a month.
Nations where A2A adoption could follow a similar
15 Payments Gets Personal | The future is digital, even for face-to-face payments
trajectory include India and Mexico.
Responsible BNPL:
Bringing robust vetting to
an unregulated segment
6%
Buy now, pay later is the digital evolution of the installment and layby of consumers already use BNPL
payments options that some retailers have offered for years. BNPL has
at least 5 times a month
high consumer appeal because it helps people stretch their budgets and
62%
shields them from interest payments.
of current BNPL users think it
Our survey respondents said they would double their usage of BNPL could replace their credit cards5
for online shopping in the next three years. Some 40% of respondents
said they would be more willing to adopt BNPL if it was provided by their
primary bank. In response to demand, incumbents like JPMorgan Chase3
in the US and TD Bank in Canada4 are dipping their toes in the water.
40% of consumers would be more willing
to use BNPL if provided by their primary bank
Source: 2022 Accenture Global Consumer Payments Survey
16 Payments Gets Personal | The future is digital, even for face-to-face payments
Consumers are considering alternatives
for cross-border payments
Most consumers still use traditional options such as bank transfers
(45%) and traditional money remittance providers (33%) for
cross-border payments. However, they are increasingly willing to
consider alternatives that are faster, easier, more convenient, and more Figure 10. Reasons most likely to persuade consumers to switch to a
affordable—for example, money remittance mobile apps (used by 10% next-gen cross-border payments option.
of our survey respondents) or fintech-provided peer-to-peer apps (10%).
Q: Which of the following factors would convince you to change the method
In some growth markets like Brazil, we see higher adoption of fintech you use for cross-border payments?
peer-to-peer apps, with 29% of consumers preferring this method
compared to the 36% who favor traditional bank transfers. These solutions One click in a mobile wallet without
offer a lifeline to unbanked populations in growth markets who traditionally involving a third-party provider 19%
use cash to send money abroad.
More affordable /
favorable exchange rate
18%
For many banks, remittances are an unprofitable sector due to
small volumes; in some countries, banks have exited the space.
More convenient for the
For consumers in emerging markets, fintech applications are faster receiver to get the funds 16%
and more affordable. They also offer people in remote areas a financial
service they may not otherwise be able to access. My bank recommends an
alternative method 15%
Among our respondents, one in five claim to own cryptocurrencies.
Consumers bought crypto for several reasons: as a long-term investment, The alternative method
clears in real-time 15%
out of curiosity or for speculation. However, 17% bought them to have
access to an alternative payment method, and 12% claim they use it for
Source: Accenture Payments Survey, 2022
cross-border payments.
17 Payments Gets Personal | The future is digital, even for face-to-face payments
Figure 11. The reasons why consumers bought cryptocurrencies.
To have access to
alternative payment methods 17%
18 Payments Gets Personal | The future is digital, even for face-to-face payments
The future is even
more seamless, but control
remains important
19 Payments Gets Personal | The future is digital, even for face-to-face payments
In fact, many consumers are already making small automated purchases,
such as paying tolls with a transponder fitted to their car. Among our respondents,
42%
42% said they would use M2M payment for low value transactions, but they still
want control over their transactions. Some 58% are afraid of losing track of their of respondents would use machine-to-
payments if automated machines pay on their behalf. machine payments for low value purchases
58%
Meta—the owner of WhatsApp, Instagram and Facebook—has led investment are afraid of losing track of payments if
into the metaverse. The company recently revamped and rebranded Meta Pay, automated machines pay on their behalf
a possible first step toward creating a digital wallet for the metaverse.8 We found
that 58% of consumers are afraid to transact in the metaverse as they don’t trust Source: 2022 Accenture Global Consumer Payments Survey
the payment providers. But 50% would be more comfortable transacting in the
metaverse if their primary bank facilitated the transaction.
“I’d like to see a feature that makes it a little easier for me to access my digital wallet.
Being able to just use my face or fingerprint recognition would be great.”
Amy, 38, Tucson, US
20 Payments Gets Personal | The future is digital, even for face-to-face payments
Turning
disruption into
opportunity
for growth
500
2022 2023 2024 2025
advantage for
By contrast, consumers’ confidence in
next-generation payments providers
banks—but it’s
and newer instruments such as
cryptocurrencies has been shaken by
not enough
high-profile incidents of fraud
and mismanagement.
Percentage of consumers who trust organizations to provide a secure environment for payments and purchasing.
Global:
Global:
84% 74% 64%
84% 74% 64% 47% 31%
47% 31% 23%
23%
87% 85% 85%
87% 81%
85% 85% 80%
81% 77%
80%
74% 73% 74%
77%70%
74% 73% 74% 67%
70% 63% 63%
67%
63% 55% 63%
55% 50%
41% 50% 44%
35% 44%
41% 33% 31%
35% 28%
33%
21% 31%
28% 18%
21% 14%
18%
14%
My Primary Bank Visa/Mastercard/ A2A Transfer Apps Bigtech BNPL Providers Crypto Wallets
Amex/Discover
My primary bank Card networks A2A transfer apps Bigtech BNPL providers Crypto wallets
Our research indicates 84% of consumers trust their bank, compared to just That said, banks cannot count on trust alone as a competitive edge that
31% who trust BNPL providers. Because they trust banks to secure payments, will last forever. While consumers have less trust in next-gen payment
more than a third (38%) would be willing to use next-generation payments solutions and providers, they are still willing to try alternatives to their banks’
instruments such as BNPL and crypto if provided by their main bank. traditional offerings. This is especially true when they are frustrated with
This offers banks an opportunity to step in with solutions that level the their banks’ payments experience or if they have needs that the bank is
playing field with new entrants. not addressing.
24 Payments Gets Personal | Turning disruption into opportunity for growth
Consumers want friction-free experiences,
but control matters too
Our survey reveals that consumers are frustrated with current in-person and
online payment options. Slow transactions, failed payments and a lack of
Figure 14. Consumer payments frustrations. merchant support for their preferred payments options are among the biggest
frustrations consumers reported in our survey. Banks need to offer frictionless
Q: What are your greatest frustrations with current payment methods? experiences or risk losing customers to players that offer more flexibility,
speed and ease of use. It is not surprising that the key drivers for adoption of
next-gen payment methods are solutions that address the frustrations.
Slow payment experience 19%
Figure 15. The attributes of digital wallets which consumers value most.
“I’ve stopped using my debit card as much and I’m using cash just to be able to
budget easier, feel more in control, less tempted to overspend. I can only spend
what’s in my purse, so I don’t go looking around for little extra treats to give myself.”
Lyndsey, 44, Rochdale, UK.
What is a super-app?
solutions that help them control their payments and financial lives
is by developing super-apps. Our research finds there is a growing
segment of consumers ready to embrace apps that offer full visibility
of payments together with disparate financial products like savings, A super-app is a mobile or web application that can provide multiple
cashback, rewards, investments, and wealth management. services including payment and financial transaction processing.
It is a self-contained commerce and communication online platform
Today, there are only a handful of true super-apps—such as Line in that embraces many aspects of personal and commercial life
Japan—most of them in Asia-Pacific. But our research suggests that
including activities such as travel, entertainment, traffic updates,
the time for super-apps may finally be at hand in other markets, too.
Furthermore, we are seeing players as disparate as PayPal, Revolut and
personal services from providers such as doctors, and more.
even Twitter move towards becoming super-apps.
India’s Paytm11 and PhonePe12 offer not only payments options and
financial products (insurance, equity trading) but also train tickets and
cinema bookings. Paytm already has 300 million users in India and aims
to deliver financial inclusion to 500 million consumers, in a country
where 13% of the adult population is unbanked13.
60%
want a single app which tracks payments Avo from Nedbank in South Africa is a super-app that aggregates services
from multiple payment providers, giving and goods from a variety of providers. The app started out as a platform
them greater transparency and control to buy groceries, order a meal, or access services like plumbing. It has since
expanded into offerings such as Avo Auto—an end-to-end virtual vehicle
Source: 2022 Accenture Global Consumer Payments Survey
mall.14 Avo has grown to 1.5 million users and 21,000 merchants
28 Payments Gets Personal | Turning disruption into opportunity for growth
since it was launched in 2020.
Figure 16. Features that would encourage consumers to adopt super apps.
anyhow
take the products they want to buy, customers alike. So too is
and leave.
31 Payments Gets Personal | Taking the pain out of payments: four strategies for banks
To achieve seamless payments experiences, banks can
choose to pursue one or more of the following strategies:
Players following this strategy $1.5 trillion have moved across the Banks that choose this strategy Today it stays true to its core strategy
will scale quickly to ensure rapid network.16 Banks in Poland built the will focus on increasing customer of international payments but has
adoption of their next-generation Blik national A2A payments system intimacy through deep insight laser focus on reducing friction and
payments solutions. Simple to avoid losing market share to non- into customers’ behaviors and cost for its customers. It added
customer journeys and the right banks.17 needs. Most banks are already an international debit card to its
partners are the keys to success. offering banking apps and digital product portfolio to better serve
Banks in many markets have Building on their Apple Card wallets to replace physical branch travellers shopping abroad. It serves
defended core payments revenues partnership, Goldman Sachs and interactions and digitize payments. 13 million customers and move
by collaborating with each other to Apple are introducing high yield While these applications are limited more than $10 billion per month,
lock out new entrants. savings accounts for Apple Card in functionality, usage is high, and saving customers $3 million a day
holders. Under the agreement, customers trust the apps. compared to traditional international
In the US, for example, Bank of Goldman Sachs will administer the payment services.19
America, Truist, Capital One, zero-fee, FDIC-insured accounts.18 Banks can invest in artificial
JPMorgan Chase, PNC Bank, U.S. This partnership has the potential intelligence (AI) and the cloud to
Bank, and Wells Fargo launched the to bring new customers to the bank contain costs and streamline the
Zelle peer-to-peer money transfer and provide a significant platform experience. Wise is a fintech with a
app in 2017. Since then, more than to scale other products in future. vision of making international money
five billion transactions and nearly transfers cheap, fair, and simple.
32 Payments Gets Personal | Taking the pain out of payments: four strategies for banks
3.Niche focus 4. Beyond payments
Banks can differentiate their payments Banks can go beyond payments with These partners give PayPal access
brands by focusing on customer or online marketplaces or super-apps. to incredible skills, technology
product niches. Deep understanding Such a strategy can position them and market entry assets, which it
of customer requirements and the in the center of consumers’ digital leverages to reduce friction and
right partnerships are essential. lives. They will need to use dynamic expand its product portfolio.
data to understand and respond to
Minna Bank, Japan’s first digital bank, consumers’ requirements, and are Singapore’s DBS, meanwhile,
launched an innovative banking and likely to partner with other companies collaborates with start-ups through a
payments app which saw more than in the ecosystem to identify and marketplace enabled by application
1.6 million downloads in the past resolve customers’ unmet needs. programming interfaces (APIs).
18 months. Key to its success is its Its open banking marketplace curates
core customer-centric strategy and a Players such as PayPal illustrate how a range of experiences from partners
commitment to developing services such a strategy succeeds when banks in health, cars, education, travel,
from the customer’s perspective.20 invest in core technologies such as property and more.22
cloud and AI to enable easier partner
integration and speed to market.
Part of PayPal’s success lies in its
ability to partner at scale with players
like banks, commerce platforms
and other fintechs.21
33 Payments Gets Personal | Taking the pain out of payments: four strategies for banks
Figure 17. Four potential strategies for banks aiming to grow their payments revenues.
Partner
• Customer journey front and • Super-app—continued innovation
center—a differentiator • Dynamic data—continuous customer
WeChat
• Select product sets are key, while choosing monitoring and product integration
partners to scale quickly • Pro-active new product identification /
DBS solving unmet needs
PayPal Marketplace
• Ecosystem collaboration is key to success,
Zelle
Approach
always enhancing product value
Goldman Sachs – Paytm • Technology priorities e.g. cloud, AI to
Apple Card Nedbank Avo enhance agility and speed to market
Blik
Wise Minna
Typical bank
payment app
Alone
34 Payments Gets Personal | Taking the pain out of payments: four strategies for banks
Put a stake in
the ground
Banks walk a delicate line between protecting their existing interchange
fees and interest income from traditional payments on the one hand, and
capitalizing on revenues from new digital payments options on the other.
While many banks are making investments in newer technologies, their core
focus remains on protecting the integrity of their core banking systems and
avoiding risk.
With rising interest rates pushing up the price of money, both payment
providers and consumers are impacted. Consumers are already considering
switching to a different primary payment method to reduce cost, while
providers find it more difficult to maintain liquidity in the face of growing
demands for real-time payment in a rising interest rate environment.
Consumers will welcome solutions that give them more choice and control
in payments, while providers should ensure liquidity through predictive
solutions. The revenue opportunity at stake is significant, and now is the
time for banks to choose a strategy that will ensure their future growth and
relevance in payments.
Edlayne Burr
Growth Markets Payments Lead, Accenture
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37 Payments gets personal