The beneficiary of the cash decline in 2020 was the physical card. In the UK, regular debit card usage grew by 5 per cent over the 2019 to 2020 period while in Canada regular credit card usage grew by 5 percentage points to 71 per cent of consumers over the same period.
At the same time, as card usage increased, research illustrates a tick up in contactless usage. Australia has long led the way in contactless card usage but had seen it plateau in 2018 and 2019 at 70 per cent of the population. 2020 saw this proportion jump to 86 per cent as consumers sought to minimise contact with payments in as many ways as possible.
This knock-on effect has also been seen to an extent in the perennially underperforming world of mobile wallets. However, the jumps are less meteoric, with regular mobile wallet usage still something of an exception for the large majority of WEIRD consumers. The UK led the way with regular usage at the end of 2020 but with only 11 per cent of consumers fitting this criterion, there is more to be done before Apple Pay and Google Pay and their ilk win over the payments landscape.
Success in the payments world is underpinned by three pillars: speed, convenience and security. If consumers feel like their current payment preferences fulfil these three criteria, it will be hard to shake this behaviour to any large extent. Mobile wallets have discovered this the hard way in recent years.
Tried and trusted or new and shiny?
With these changes in channel and payment behaviour, it should come as no surprise there have been shifts in the extent to which WEIRD consumers are willing to use a digital-only provider for their main financial institution.
Banks are the most trusted institutions for consumers when it comes to keeping their data safe. Globally, when asked to share the extent to which they trust certain types of organisations in this regard, banks come out on top for consumers.
So, does this mean, if you are a traditional bank, you have no threat to worry about from neo-banks or fintechs? Unfortunately not. In WEIRD societies, the proportion of consumers comfortable with a digital-only provider sat at 42 per cent at the end of 2020, up 5 percentage points from the end of 2019.