1 in 5 consumers to spend more this holiday season, driven by payment technologyTSG and ETA surveyed U.S. consumers to understand how payment preferences, spending trends, and consumer sentiment have shifted this holiday season. Download the complete study here.
Omaha, NE, Nov. 22, 2023 (GLOBE NEWSWIRE) — Economic pressures have driven many in the U.S. to think twice about how much they’re spending this holiday season, however consumers are generally more optimistic this year, with one in five planning to spend more, thanks to the convenience and flexibility of newer payment methods like Tap-to-Pay, digital wallets, P2P applications, 1-click accounts, QR codes, and buy now, pay later (BNPL). That’s according to new insights released by TSG (The Strawhecker Group), a globally recognized analytics, intelligence, and solutions-focused firm in the payments industry, and the ETA (Electronic Transactions Association), the world’s leading advocacy and trade association for the payments industry.
TSG and ETA surveyed over 1,000 U.S. consumers in October to see which newer payment technologies continue to drive payment choice at checkout, and what other factors are on consumers’ minds as they consider their holiday spend.
“We found almost a quarter of shoppers feel confident enough now to leave the house without a physical wallet,” said Mike Strawhecker, President at TSG. “Shoppers are seeking ease and seamless experiences at the checkout, and digital wallet options from Apple, PayPal, Google, Samsung, and others are resonating with consumers.”
In fact, the study found that 28% (up from 25% in 2022 and 22% in 2021) plan to pay for gift purchases this year using digital wallets.
Embracing The Digital Options
Separately, consumers increasingly use P2P applications, growing from 67% in 2022 to 74% in 2023. More specifically, Venmo and Zelle saw the greatest usage growth year-over-year of 7% and 9%, respectively. Generationally, less than half of Baby Boomers and the Silent Generation use P2P applications, compared to 75% or more of younger generations.
Thirty-six percent of shoppers leverage BNPL options. Generationally, nearly half of Gen Z and Millennials used BNPL, less than a third of Gen Xers do, and even less of Baby Boomers.
Still, plastic remains king when it comes to holiday spending. Fifty-five percent of shoppers plan to use credit cards, followed by 54% for debit. Debit ranked as slightly more popular for in-store shopping, while credit cards came out on top online. Since 2021, cash use has been trending downward from 47% in 2021 down to 43% in 2023.
What Are Shoppers Feeling & Planning?
The vast majority of shoppers plan to do a combination of both in-store and online shopping. In-store shoppers will visit large retail stores, and 30% plan to shop locally at small businesses. For online shoppers, a whopping 71% plan to browse Amazon for gifts, and over half will shop at retailer’s websites.
Overall, shoppers are feeling more optimistic than last year about encountering holiday shopping frustrations. COVID-related unease is a thing of the past for most shoppers. With the continued threat of a recession and high inflation rates, economic concerns are top of mind. Still, a majority of shoppers plan to spend between $250 and $500 this season. More low-income shoppers are stretching their budgets to overspend on gifts, while not many high-income shoppers choose to save on gift-giving.
As an increasingly common fee added at the point of sale, surcharging was a new topic for this year’s survey. 66% of respondents surveyed did not know what surcharging was, yet after providing an explanation, two-thirds felt that surcharging was an unfair practice. Only 7% of consumers viewed businesses that charge customers a surcharge fee positively.
TSG and ETA conducted a survey consisting of 1,005 consumers in the U.S. to understand how payment preferences, spending trends, and consumer sentiment have shifted this holiday season. The survey was conducted between October 21, 2023 and October 27, 2023. The survey represents consumers across demographics such as state, gender, age, and household income. The margin error is +/-3.09% at a 95% confidence level.
TSG (The Strawhecker Group) is a globally recognized analytics and consulting firm that supports the entire payments ecosystem, serving over 1,000 clients from Fortune 500 leaders to more than a dozen of the world’s most valuable brands. Trusted by industry leaders, TSG’s strategic services, market intelligence, and analytics merge to empower clients with actionable and accessible information. Please visit www.tsgpayments.com.
The Electronic Transactions Association (ETA) is the world’s leading advocacy and trade association for the payments industry. Our members span the breadth of significant payments and fintech companies, from the largest incumbent players to the emerging disruptors in the U.S. and in more than a dozen countries around the world. ETA members make commerce possible by processing approximately $44 trillion annually in purchases and P2P payments worldwide and deploying payments innovation to merchants and consumers. For more information, visit electran.org.