Payment Methods and Funding Mechanisms

How the Lasting Shift to Digital Payments Is Shaping Providers’ Fight for Volume and Share of Wallet

Report by Jaime Toplin  | Feb 8, 2022

The Payments Ecosystem 2022

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The Key Trends Changing How Providers Compete for Customers and Transactions

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Table of Contents
Executive Summary
Key Points
Introduction
Cash
Checks
Debit Cards
Credit Cards
Prepaid and Gift Cards
BNPL
Bank-to-Bank Electronic Transfer Payments
Cryptocurrency Payments
Read Next
Sources
Media Gallery
About This Report
Payments Ecosystem: Diminishing analog payment use—as well as the battle for share between entrenched electronic payment methods and emerging challengers—will intensify the battle for customer spending this year.
Topics
Mobile Payments
Credit & Debit
Transfers
United States
Table of Contents
Executive Summary
Key Points
Introduction
Cash
Checks
Debit Cards
Credit Cards
Prepaid and Gift Cards
BNPL
Bank-to-Bank Electronic Transfer Payments
Cryptocurrency Payments
Read Next
Sources
Media Gallery

Executive Summary

Cash, check, card, and electronic bank payments dominate consumer and business payments. But pandemic-driven digitization is changing share of wallet as analog methods continue to decline. In their place, card and electronic transfers will surge, while alternatives like installment loans and cryptocurrencies will threaten giants’ market share.

3 KEY QUESTIONS THIS REPORT WILL ANSWER

  1. What are the largest consumer payment methods and funding mechanisms by volume and demand?
  2. How are volume, adoption, and usage changing in each segment?
  3. What are the top trends affecting payment method providers’ growth and revenue strategies in 2022?

WHAT’S IN THIS REPORT? We define and size major payment method and funding mechanism types, offer growth insights and forecasts, and evaluate key trends affecting consumer and business usage in the year to come.

Payment Methods Preferred by US Adults, 2016-2020 (% of respondents)
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KEY STAT: The share of consumers citing cash as their preferred payment method fell by nearly 10 percentage points from 2016 to 2020, while card payments became more popular.

Here’s what’s in the full report

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Table of Contents

  1. Executive Summary
  2. Key Points
  3. Introduction
  4. Cash
  5. Checks
  1. Debit Cards
  2. Credit Cards
  3. Prepaid and Gift Cards
  4. BNPL
  5. Bank-to-Bank Electronic Transfer Payments
  1. Cryptocurrency Payments
  2. Read Next
  3. Sources
  4. Media Gallery

Charts in This Report

Payment Methods Preferred by US Adults, 2016-2020 (% of respondents)Share of Consumer Transactions Made in Cash by US Adults in a Typical Month, 2015-2020 (% of total payment transactions)
US ATM Users, 2019-2025 (millions and % change)Share of US Adults Using Checks per Month, 2015-2020 (% of respondents)
US Digital* vs. In-Store Debit Card Transaction Value, 2019-2023 (billions)US Digital* vs. In-Store Credit Card Spending, 2019-2023 (billions)
US Digital* vs. In-Store Prepaid Card Spending, 2019-2023 (billions)US Digital-Only Bank Account Holders and Penetration, 2021-2025 (millions and % of population)
US Buy Now, Pay Later (BNPL) Service Users and Penetration, 2019-2025 (millions, % change, and % digital buyers)Reasons US Internet Users Use Buy Now, Pay Later (BNPL) Services, March 2021 (% of respondents)
US Automated Clearing House (ACH) Transaction Volume and Value, 2018-2021 (billions of payments and trillions of dollars)

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authors

Jaime Toplin

Contributors

Daniel Decea
Researcher, Financial Services
David Morris
Principal Analyst
Julia Woolever
Senior Report Editor