Consumers spend more with digital wallets

The news: Consumers who use digital wallets spend 31% more than non-users across a range of categories, per a PYMNTs and AWS survey of 2,501 US respondents.

• The boost was strongest for restaurant sales: Digital wallet transactions averaged $44 per ticket, versus $33 for non-wallet sales—a 33% jump.
• Retail sales got a 17% bump from wallet users, and digital wallet grocery sales were up 4%.

Digging deeper: Demographic trends played a big role in boosting digital wallet transactions.

• Digital wallet users skew toward the better-off: While only 49.4% of US consumers reported using digital wallets in the survey, nearly 55% of consumers making more than $100,000 annually said they used digital wallets.
• That share decreased for each subsequent income bracket: Just 41.2% of those earning less than $50,000 said they use digital wallets.

The disparity in wallet use across income brackets suggests that—at least in part—larger digital wallet sales are the product of digital wallet users having more disposable income than non-users.

A trend for the ages: Digital wallet use varies even more dynamically across age cohorts, suggesting that digital wallets will continue to attract larger shares of spend.

• Nearly 80% of Gen Z consumers use digital wallets, according to the study.
• By contrast, that figure was 66% for millennials, 43.7% for Gen Xers, and 25.7% for baby boomers.

What this means for retailers: Which payment methods retailers’ biggest spenders—and the shoppers of tomorrow—prefer is integral to increasing sales and reducing cart abandonment.

• More than 4 in 10 consumers (42%) said they would give up on their purchase if their preferred payment method wasn’t offered at checkout, according to PPRO.
• Digital wallets are also quickly becoming commerce enablement platforms through features like digital smart receipts and payment method optimization. These services can boost both user loyalty and purchase conversion.

This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a daily recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.

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