U.S. consumers are apt to have more money—$485 on average—in their PayPal Holdings Inc. accounts than cash in their wallet, $196, finds the Future of Money Study from Logica Research. San Francisco-based Logica Research, formerly Koski Research Inc., also found that 58% of Americans have a PayPal account.
A number of factors may account for the difference. One is that consumers expect to use the PayPal balances for more purchases. Fifty-five percent like to maintain a balance in their PayPal accounts for other payments, while 25% do so because they find it easier to track expenses. Twenty-one percent haven’t yet moved the funds to another account and 19% prefer to keep funds in PayPal rather than a bank account.
“When we look at the reasons why Americans keep money in their PayPal accounts, they tell us it’s primarily to make other payments,” Lilah Koski, Logica Research founder and chief executive, tells Digital Transactions News in an email. “It’s likely that the amounts of the purchases they make with their PayPal balances/accounts are higher than the amounts of the purchases for cash.”
Cash use, or rather the non-use of it, may be another reason for the difference.
“We see from other questions on our survey that use of cash is going down,” Koski says. “Americans predict they will use digital apps for the number-one way they pay five years from now for in-person payments and predict PayPal as number one for online payments five years from now.”
Earlier this year, in a previous study, Koski’s firm found that among consumers 16-to-19 years old, 25% think a payment app will be the top-of-wallet choice for in-person payments in five years.
More younger consumers—27% of Millennials—would put an extra $500 into a PayPal account, compared with 18% of all Americans.
PayPal had $139 billion in payment volume in the second quarter of this year on 2.3 billion payment transactions. Its mobile volume of $54 billion is 39% of its total volume.