Inflation ramps up digital spend, studies find

Digital commerce is indeed recession-proof, according to J. D. Power's U.S. Consumer POS Payment Program, published Aug. 31, 2023, which combines survey data from four previous studies: POS Choice Satisfaction Study; Debit Card Satisfaction Study; Digital Wallet Satisfaction Study and BNPL Satisfaction Study. Aggregated insights reflect rapidly changing consumer and merchant behaviors across all points of interaction, noted Miles Tullo, managing director of banking and payments at J.D. Power.

"The POS payment landscape is moving very quickly, and consumers are being confronted with so many different options that we're seeing a real splintering of the total addressable market," he said. "Consumers now use multiple different payment options for dozens of different reasons, mostly correlated with specific needs but sometimes out of basic habit."

Tullo further noted that the inaugural program broadly measured usage and satisfaction among 62,635 consumers between April and June 2023, transacting across 11 POS payment methods and 30 hardware brands that offered credit and debit cards, digital wallets and BNPL products. Analyzing consumer behavior across different POS products, scenarios and consumer personas provided critical insights on consumer attitudes, he noted, and how brands can leverage that knowledge to scale POS payment products.

Consumer preferences

The combined surveys also found extremely nuanced consumer behavior, researchers noted, citing the following key takeaways of the four 2023 studies:

• Debit cards rule: Debit cards scored highest in the surveys, accounting for 78 percent of consumer purchases, followed by 66 percent credit card, 36 percent digital wallet, 33 percent gift card, 28 percent BNPL, 20 percent merchant app, 19 percent check, 14 percent prepaid products, 7 percent pay-by-bank and 3 percent cryptocurrency.

• Multiple payment types in play: 4.1 different payment methods are used on average by consumers, who gave different reasons for using each product, from ease of use to social cachet of using different payment methods.

• Non-traditional payment methods on the rise: 55 percent of respondents have been using digital payment methods, including digital wallets, BNPL, merchant apps and cryptocurrency. The most frequently used are digital wallets (36 percent) and BNPL (28 percent).

• Consumer segments are real: Researchers identified six distinct consumer personas that POS payment brands can use to segment the market and target delivery of their offerings: experimenters; borrowers; rewards optimizers; security seekers; budgeters; and minimalists.

• Financial health is major consideration: Researchers confirmed that a consumer's financial health and perception of current economic conditions influence POS decision-making.

Additional information about the U.S. Consumer POS Payment Program can be found at www.jdpower.com/business/consumer-payments-satisfaction-studies.

Small change in restaurant tipping

Additional research from Lightspeed showed inflation's impact on the foodservice industry, which is dealing with rising employee turnover and staffing shortages. Published Sept. 19, 2023, and based on two surveys of several thousand restaurants in North America, between April and June 2022 and the same period the following year, researchers found consumers are dining out more frequently, despite ever-rising menu item pricing, with transaction volumes in fine dining up by 3.60 percent and fast casual by 3.53 percent.

Researchers also found healthy tipping levels among restaurant guests, with the highest levels at bars and fine dining restaurants. By contrast, they noted that takeout and delivery tipping notably dropped to around 8 percent.

Peter Dougherty, general manager, hospitality at Lightspeed Commerce, acknowledged the challenges that bars and restaurants are facing, and stated that self-attended and automated technologies can help restaurants improve efficiencies.

"Technology like Lightspeed Restaurant helps hospitality businesses increase speed of service and table turnover while reducing time spent on manual tasks, so they have more time to spend with guests—even when they're short-staffed," he said.

Additional survey data from Lightspeed Restaurant is available at www.lightspeedhq.com/pos/restaurant.

Whether you want to upgrade your POS offerings, find a payment gateway partner, bone up on fintech regs or PCI requirements, find an upcoming trade show, read about faster payments, or discover the latest innovations in merchant acquiring, The Green Sheet is the resource for you. Since 1983, we've helped empower and connect payments professionals, starting with the merchant level salespeople who bring tailored payment acceptance and digital commerce tools, along with a host of other business services to merchants across the globe. The Green Sheet Inc. is also a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals.

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