U.S. consumers have made the credit card their favorite online and face-to-face spending method, with 31.5% using it online and 40% choosing it for in-store transactions last year, according to the Worldpay Global Payments Report 2018.
Released late last week, the report also found that debit cards and digital wallets, at 20% each, were the second most popular online payment methods. In stores, 35% of U.S. consumers preferred debit cards, with 16% choosing cash.
But both credit and debit cards, for online use, appear to be declining in popularity, Worldpay says. Credit cards are on track to lose 7.8 percentage points over the next five years, reaching 23.7% of the market by 2022. Debit card use will fall from 20% to 18.5% in the same time period.
Digital wallets, however, appear to be gaining more favor with consumers. Worldpay says their use is increasing at a 25% annual rate. “Currently 20.9% of the market, eWallets are on track to overtake credit cards as the popular online payment method in 2020, at which point they will make up 29.1% of the market,” Worldpay says. By 2022, digital-wallet payments, which includes services like Masterpass, Visa Checkout, and PayPal, will comprise 40.5% of the online market. Even in-store use of digital wallets is growing at what Worldpay says is a 33% annual rate.
Among other insights, Worldpay forecasts that mobile commerce will overtake desktop online commerce globally by 2023. In the United States, m-commerce is the fastest-growing sales channel at 15%, while desktop sales are growing at a 6% annual rate.
“The mobile phone is the central disruptive figure in many industries,” Worldpay notes in the report. “Yet ‘mobile’ is often thought of as simply another channel. Even more profound, the mobile phone serves as a revolutionary catalyst, freeing all commerce from any conception of channel. What the mobile phone started is now spilling over virtually everywhere.”
“U.S. consumers are turning from their desktop to their phones to make purchases,” Casey Bullock, Worldpay general manager for North America Global Enterprise e-Commerce, said in a press release. “Merchants must find ways to optimize their mobile payment and shopping experiences, whether through their mobile app, mobile wallet, or an improved mobile checkout.”
U.S. e-commerce sales account for 9.8% of all retail sales as of the third quarter, says the U.S. Census Bureau in its quarterly retail e-commerce sales report. That’s up from 9% in the 2017 third quarter.