40+ Payment Trends & Statistics to Know (2023 Edition)

Learn payment statistics around consumer preferences for speed and convenience, including a decline in cash use and an increase in mobile and contactless payments.

New payment trends and technologies like buy now, pay later (BNPL) and innovations across traditional payment channels like live chat and messaging platforms have also mushroomed into the mainstream. Below, we review general customer payment preferences and payment statistics and trends across the retail, ecommerce, restaurant, and B2B industries.

Similar to our 2022 Payment Trends Report, consumer payment preferences that started forming pre-pandemic accelerated during the COVID-19 pandemic and have cemented themselves as the norm. While there seems to be a declining popularity in use of mobile and contactless payment methods, the payment technology innovation is driven by the convenience of cashless, card-free, instant payment methods.

Retailers have also stepped up and started implementing alternative payment methods (as well as emerging trends such as cryptocurrency), though data shows that credit cards are still the most used payment method by customers.

Did You Know?

The proposed U.S. Payment Choice Act ensures that retailers continue to accept cash as a form of payment to protect unbanked and low-income consumers.

According to a Pew Research Center study, Americans are heading to a cashless economy— but not as fast as was initially foreseen. From its initial steep dive of 15% of all transactions in 2019 to 11% in 2021, cash as an in-store payment method slightly improved to 12% in 2022. Moreover, 93% of consumers say they will continue to use cash as a mode of payment.

That said, cashless spending has become the norm for consumers, with 41% of Americans not using cash for their weekly purchases.

Cash usage also varies widely based on demographics. Age, income, and ethnicity show a role in cash preferences. Adults older than 50, households with less than $30,000 annual income, and Black consumers prefer to pay in cash.

Mobile wallet adoption has increased significantly since the second quarter of 2022, led mostly by Generation Z and millennial consumers. Gen Z consumers paid via mobile about 9.5% of the time (a 29% increase from 2021). Millennials and bridge millennials paid for in-store purchases through mobile wallets 7.9% (44% growth) and 7.7% (31% growth) of the time, respectively.

Mobile payment adoption rates across all income and financial lifestyle segments have also increased, except for those earning $100,000 or more annually (those rates basically remained flat at around 6%).

While mobile wallets are still far from outpacing contactless cards as a payment preference of most consumers, they are the most popular new payment method—59% of consumers who tried a new payment method in the past year used one.

According to a PYMNTS report, less than 23% of surveyed consumers were interested in trying out a new payment method, except for one—digital wallets. More than 40% are willing to give digital wallets a try in the next 12 months.

Tap to pay is winning the battle for touch-free checkouts. In the second quarter of 2022, contactless card payments accounted for 14% of in-store purchases, 2.5 times more than mobile wallets and nearly twice the figure from 2021.

According to S&P Global Market Intelligence’s Connected Customer, Disruptive Technologies 2022 survey, 59% of US customers have a contactless card. About a third use it more often because of tap to pay.

We expect the increase in contactless payments to continue, with many card issuers still

rolling out contactless cards to their customers and many merchants still lacking the technology to process them.

Related:

Learn more about the NFC payment technology that powers contactless card payments and additional contactless payment statistics.

Overall data from PYMNTS shows that of consumers earning more than $100,000 per year:

66% adopted digital wallet payments
51% prefer card payments (credit cards, debit cards, prepaid cards, store cards)
30% would rather pay with cash or check
16% have tried online bank transfers

Card Payments are Here to Stay

There is growing popularity of alternative payments among consumers, but the NRF sees mobile wallets or Buy Now, Pay Later (BNPL) options posing no danger to credit and debit card usage in the payments market.

For example, digital wallets like Apple Pay, which is used three times as much as Google Pay, only accounts for 2.4% of in-store purchases.

BNPL providers’ (Affirm, Afterpay, Klarna, PayPal, and Zip) $24 billion in purchases from over 180 million consumers is still a far cry from the $9.4 trillion for credit and debit card purchases in 2021, even if the BNPL figure is a ten-fold increase from 2019.

Learn more about BNPL

Consumers Find Convenience in Digital Wallets

In this age where the culture of convenience is evident in almost every aspect of a person’s life, the ease of doing payments now plays a significant role in consumer behavior. With that said, it’s hard to ignore the role of smart devices in the latest digital payment trends that’s mentioned above.

What this means for merchants:

Consumers are more inclined to try digital wallet payments for the first time compared other payment methods that they have not used before
Consider offering a digital wallet as a payment option over BNPL or cryptocurrency

The 2023 retail and ecommerce payments trends report reiterates that payment habit shifts formed during the COVID-19 pandemic are the new normal. Retailers and consumers quickly adopted contactless payment methods (like Apple Pay) and opted for alternate pickups (“buy online, pick up in-store,” curbside) during the pandemic.

Since then, digital payment options have only increased in popularity, and retailers are continuing to adopt alternative payment methods. Other payment methods like Buy Now, Pay Later (BNPL) have also seen rapid adoption because of increasing consumer awareness.

We also see fraud and security risks are still crucial in retailers’ payment decisions last year and will drive their priorities in 2023 and beyond.

Retailers continue to implement various digital payments. Apple Pay and Google Pay are leading the pack (as of late 2022), with 80% and 65% of retailers either offering or planning to implement the payment methods, respectively, in their stores within the next 18 months.

In the past three years, consumer awareness and adoption of BNPL has skyrocketed. Forrester’s 2022 data indicates 15% of US online adults had used Afterpay, Affirm, Klarna, PayPal Credit, or Pay in 4 (with PayPal) in the past three months to make a purchase.

Due to the increase in consumer demand, 58% of retailers who participated in the Forrester/NRF Survey have already implemented at least one BNPL option in-store, with 38% of retailers coming out with their own installment financing options.

Convenience Is the New Customer Service

Frictionless, seamless, cash-free payment processing provides convenience—which is why digital payments are growing in popularity. This is not limited to payments, but also encompasses other functionalities such as refunds, product recommendations, and information security.

In the U.S., consumers prefer digital shops (and would leave other shopping apps) to look for these features.

Still On the Fence With Cryptocurrency

Retailers remain wary of adopting cryptocurrency as a payment method for their stores, although there are big brands that currently accept crypto—Chipotle, Regal Cinemas, Whole Foods Market, Baskin-Robbins, and GameStop.

In the NRF 2022 State of Retail Payments report, only 2% of respondents have implemented Bitcoin or other crypto payments in their stores. Moreover, many retailers do not expect their businesses to accept crypto in the next three to five years, citing a lack of consumer demand. Other reasons include regulatory uncertainty (59%), exchange rate volatility (42%), and risk and complexity issues with know your customer (KYC), and anti-money laundering (AML) (42%).

Hardware-free Payment Processing

In retail, an overview of the latest payment trends is not complete without looking at hardware. Technological advancements in payment processing now provide small merchants and startups with the ability to accept instant payments without investing on additional POS devices—all one needs is their smartphone or mobile device.

QR code payments: These are easy and practically free to implement for both in-person and online transactions. Merchants can find free QR code generators online while some payment processors like Square offer this feature. Learn more in our QR code payment guide.
Tap-to-pay: With a mobile payment app, merchants can accept payments with a tap from the customer’s own smartphone with a mobile wallet, EMV-enabled cards, and other connected smart devices.
Credit card scanner: The latest payment processors offer free mobile payment apps with scan-to-pay functionality. Merchants can use the camera of their mobile device to scan a customer’s credit card. The customer then manually enters their card’s security code to authorize payment. Learn more in our guide to the best credit card payment apps.

Mitigating fraud and reducing fees topped merchants’ payment priorities last year and have continued as priorities in 2023.

The Forrester/NRF report shows that reducing fees from payment gateways (36%) dominated in-store payment initiatives. Supporting omnichannel settings ranked second. Fraud mitigation ranked third on the list, with chargeback reduction also a crucial priority for retailers, ranking fourth.

Fraud Mitigation

Forty-two percent of retailers said improving security (fraud, management encryption) is among their top three priorities, with 57% of respondents agreeing that requiring PINs improves transaction security (notably down from 71% in 2020 and 95% in 2018). Interest is growing in other areas—43% would implement biometrics for credit card transactions if banks allowed them (compared to 22% in 2020).

Fees Reduction

Fees remained a pain point for most retailers last year, with 30% of them saying the costs of accepting payments (like processing and network fees) were a top challenge in the past 12 months. Twenty-one percent said the same about chargebacks.

Ecommerce retail greatly benefited from the emergence of alternative payments, such as digital wallets. While shopping cart abandonment rates remain very high, BNPL and one-click checkout options are seen to help decrease abandonment rates.

It will be interesting to see online merchants’ current efforts to extend payment methods across traditional payment channels. Live chat, third-party messaging apps, and social commerce are top priorities for payment initiatives in 2023.

Shopping cart abandonment, which happens when would-be customers start an order on a website and then leave the items without purchasing, is a common pain point for businesses of all sizes. Although there is some variation in abandonment rates from quarter to quarter, overall the figures are consistent and remain very high. More shoppers abandon their carts than complete a purchase.

According to the latest cart abandonment study, extra fees like shipping and taxes are the main reason for cart abandonment. However, a majority also leave their carts because of the checkout process—they don’t want to create an account to check out (24%), they don’t trust the website with their credit card information (18%), checkout was too long or complicated (17%), or there are not enough payment options available at checkout (9%).

To help decrease abandonment rates and increase conversions, streamlining the checkout process and adding more payment options are essential. For example:

Adding a BNPL payment option can help reduce sticker shock at checkout, as the amount customers pay at the point of purchase is much lower.
Digital wallet payments and one-click checkout options mean shoppers don’t have to manually enter their card information or enter it at all.
Creating an omnichannel payment platform means online shoppers who abandon their carts for fear of credit card theft have the option to complete their purchases in-store.

Learn more about shopping cart abandonment rates and statistics.

Digital payments continue to be rolled out across ecommerce platforms, with Apple Pay and PayPal leading the stakes online: 78% and 74% of retailers already accept or have plans to implement those payment methods, respectively, on their websites in the next 18 months. There’s also a significantly growing interest for Google Pay, which 25% of merchants say they also plan on implementing in the next year or so.

Meanwhile, a smaller percentage of retailers currently accept P2P payments. Only 9% and 4% of retailers accept Venmo and Zelle payments, respectively, on their websites, and 15% and 13%, respectively, have plans to implement the two payment methods within the next 18 months.

One-click Checkout: Counterpart of Contactless Card Payments

Contactless payments have made accepting in-store payments faster and more convenient. Unfortunately, this convenience has not been brought online. With 64% of the respondents in the Mastercard New Payments Index (NPI) survey (from March–April 2022) saying they are likely to make an online payment via the manual entry of card details over the next year, it is clearly time to have the benefits of tap-to-pay come to online clicks.

Enter the one-click checkout (OCC). This checkout option has slowly rolled out across popular ecommerce platforms in the past year. While there has been some resistance, with 70% of those surveyed expressing security concern, payment providers are quick to explain that OCC is different from card on file (CoF), where retailers save consumers’ cards on their database.

With one-click checkouts, consumers’ payment details are stored securely in the payment providers’ gateway through tokenization, similar to how NFC (or contactless) payments are secured.

According to Insider Intelligence, at least 4 out of 10 shoppers would consider using BNPL over their credit cards for high-ticket purchases. And the latest Digital Economy Payments report from PYMNTS revealed that the most frequent users of BNPL are consumers who earn between $50,000–$100,000 annually.

Meanwhile, nearly half of online merchants have started offering BNPL checkout options in their ecommerce platforms, with more merchants planning to accept at least one BNPL solution in their online store in the next 18 months.

The NRF 2022 State of Payments report shows that today’s consumers want to be able to pay for products across different devices, platforms, and channels. Retailers are stepping up to this challenge by implementing an optimized payment experience for smartphones (mobile commerce capabilities) and planning on accepting payments in conversational touchpoints (such as chatbots, SMS/mobile text messaging, and other third-party messaging platforms) and other innovative payment interfaces (like social commerce).

Customer preferences and restaurant priorities are still generally aligned, with both wanting faster, more convenient ordering and service options. Still, restaurant statistics show online ordering and online payment abilities top customer requests for technology features in restaurants, with fast-lane in-store pickup coming in a close second.

A PYMNTS Digital Divide study in October 2022 revealed that ordering channels requiring customers to visit the restaurant, such as dine-in and pickup, remain the most popular despite all the delivery options.

While the study shows in-person dining options remain the most popular, there is noticeable demand for alternative ordering options, calling out restaurants to offer more choices to fit consumers’ lifestyles. Overall, we see the restaurants that can offer the best omnichannel experience will have the most reach for customers.

A PYMNTS and Paytronix collaboration survey among US adults who regularly order food from restaurants shows that some 40% of restaurant customers think online ordering or payment features could encourage them to place more restaurant orders. Among technology requests, online ordering is the most popular (41%). Features related to pickup, like fast lane in-store pickup (39%) and drive-thru pickup (38%), are also among the top in the list.

Uncertainty Around Digital Self-service

Self-service kiosks, which come with remote (sometimes even off-site) ordering and payments, are among the rising innovations in restaurants. Restaurant merchants, however, are still unsure as to the soundness of self-service kiosks as an investment. Meanwhile, PYMNTS research shows that 51% of take-out and 20% of sit-down customers prefer restaurants with a self-order kiosk.

Chat-based Ordering (and Payments)

Instant message-based payments via payment links have been around for a while now. And while it does not feature among the payment trends in 2023, chat-based ordering is on the rise.

Restaurants like KFC in South Africa now allow customers to order their meals via its instant messaging app, resulting in a 40% customer response—with multiple orders in the first 90 days of its implementation. Meta (which owns Facebook) is exploring this feature as well, beginning with an investment in a restaurant ordering and messaging system in Singapore.

According to market analysis, B2B global transaction value will grow by 26% between 2022 and 2027. By 2027, over $111 trillion in payments will be transacted globally, up from $88 trillion in 2022.

Despite being three times as large as the B2C payment market, B2B payment technology infrastructure and adoption rates drastically lag behind B2C payments. Many B2B businesses are still being paid through traditional methods. Generally, 23% of B2B customers are still required to pay in person while 22% pay over the phone. These outnumber those able to pay online or via an app (31%). Adopting B2C payment methods will significantly help increase efficiencies in B2B operations.

Learn more about B2B payment statistics and challenges.

B2B payment methods are not as advanced as its B2C counterparts due to the more complex nature and unique pain points of this type of transaction. B2B merchants struggle in fully digitizing their accounting (and payment) process, citing security and cost of implementation as primary roadblocks that are not found in instantly approved B2C transactions.

Paper checks are easy to track, which complements the B2B accounting process characterized by consistent high-volume transactions and multiple checks and balances that result in longer approval and overall processing times.

That said, there are those who have managed to integrate digital payments into their B2B transactions. Another PYMNTS survey revealed an increase in the use of the following B2B payment methods in the last few years:

Automated clearing house (ACH) 68%
PayPal (64%)
Credit cards (64%)
Wire transfers (57%)
Virtual cards (55%)

According to a Blue Snap report, 68% of B2B businesses are potentially paying unnecessary cross-border fees by processing payments from international customers in the country where their business is located rather than where the customer is located.

Almost half (48%) of respondents estimate they’ve lost up to 10% of their international revenue because their payment processing vendors do not offer the right payment options. This is further confirmed by Flywire, as it said currency fluctuations and FX rate are the biggest challenges in global market expansions, with 88% saying cross-border payment collection impacts business growth.

Did you know?

It takes businesses 55% longer to receive cross-border payments than domestic ones.

B2B cross-border payments should implement modern invoicing and billing solutions along with local card acquisition and support for local payments to mitigate revenue loss.

Paper Checks are Here to Stay (For Now)

While 40% of B2B merchants are using paper checks less often, it continues to be the most popular traditional B2B payment method primarily because B2B accounting processes and even government agencies encourage it. Nonprofit organizations still report that a significant portion of their donations are made with paper checks.

What this means for merchants:

According to PYMNTS, banks are working with FinTechs to include paper checks in modernizing B2B payments. New payment processors are beginning to offer digital concierge-type services for check management and other related processes. This includes remote deposit and transaction data capture, paper check digitization, and fraud detection among others.

Big Year for Real-time Payments Technology

One of the pain points of ACH transactions is the extended approval processing time. However, real-time payment platforms are now combining ACH to provide faster transactions with lower cost. These embedded payment systems offer B2B merchants the instant payment and automation it needs.

According to the FIS 2023 Global Payments Report, there are 64 Account to Account (AtoA) payment platforms as of 2022 (4 more than in 2021), with transactions processed amounting to $525 billion globally.

AI-enabled Cross-border Payments

Unpredictable and varying foreign exchange rates has always been the challenge for B2Bs when it comes to international transactions. However, the latest in payment technology provides AI-enabled payment platforms that offer end-to-end visibility of the cross-border payment process. This includes stable and transparent currency exchange rates as well as real-time analytics.

Global Virtual Cards

Visa predicts an increase in the use of virtual cards from $1.9 trillion in 2021 to $6.8 trillion by 2026. With virtual cards’ automated reconciliation and centralized reporting, B2B merchants will have better transparency for invoice settlements and improved management of working capital. It also removes the security risk associated with physical credit cards.

Bottom Line

Small businesses can appeal to customers and changing digital payment trends by choosing a merchant account and point-of-sale (POS) system that enables contactless, digital wallets, and online payments. Preferences for these payment types are not a passing fad; contactless payments and frictionless transactions are here to stay.