Consumers prioritise experiences amid squeeze on finances
According to our latest Lost in Transaction report, in which we interviewed 14,500 consumers in 14 countries across Europe and the Americas to find out about the latest consumer payment trends, customers are demanding better experiences and more control in the way they spend.
So how can businesses adapt to these shifting priorities and demands, particularly in the area of payments?
When the cost-of-living crisis began tightening its grip on consumers, you’d be forgiven for thinking that spend relating to experiences – dining out, trips to the cinema or online video-gaming – would suffer.
However, our research shows that demand is still strong for travel, leisure, online video-gaming, and other experiences, with over half (51%) of respondents continuing to prioritise them over other discretionary spend. A sizeable number (27%) are even spending more on dining out and takeaways than they were before the cost-of-living crisis.
Very few respondents involved in our research stopped discretionary spending altogether. Only 7% stopped spending on streaming services, takeaways, and eating out, for example.
But while consumers are still spending, we can also see they’re becoming more selective and only shelling out in the ways that best suit them. This extends to the payment experience too.
In times of crisis, control is paramount
When it comes to payment preferences, the type of experience and size of the ticket inevitably impacts how consumers choose to pay. Debit cards still reign for takeaways (42%), for example, while credit cards are the most method used for long-haul flight tickets and holidays (both 34%) – likely thanks to the added layer of comfort they present.
When it comes to online gaming and iGaming, trust is the single biggest factor in how consumers pay. According to 67% of those who make online gambling purchases, their level of trust in payment methods influences how much they spend. It’s a similar number (66%) for those who make online gaming purchases.
The other top priorities for consumers making online gaming purchases or placing online bets are privacy, security, and control.
This final point is notable, with many consumers switching payment methods to gain the control they demand. For example, 71% of respondents who have changed payment habits use debit cards more often than they did a year ago.
Other payment methods on the rise among consumers over the past year are digital wallets (69%) and online cash, or eCash (60%). In fact, eCash has seen the biggest jump in usage since 2022 – in our last report, 13% of respondents told us they were paying with eCash more often than they were in 2021. For merchants, offering payment methods that deliver control over spending is a must in 2023 and beyond.
The other shift we’re seeing in consumer spending is a growing reliance on deals. It’s in our nature to love a bargain, but now, deals have become an increasingly pressing priority for consumers on the hunt for new purchases, with two-thirds of respondents (67%) stating they’re more likely to buy something during Black Friday and other seasonal sales or discounting events. For merchants, compelling promotions could play a huge role in incentivising more customers to buy.
Customers are also increasingly mindful of their shopping habits, with 61% more likely to repair an item than replace it with a new one. Meanwhile, 47% say they’d had second thoughts before checkout and abandoned their carts due to budget constraints.
If this sounds ominous, it’s important for any business to remember that higher customer expectations can be a good thing. It can push a business to adapt and improve to deliver the experience that their end customers demand -- with no surprise shipping fees, a variety of trustworthy payment options to meet consumer preferences, and a seamless payment process.
About the author
Rob Gatto joined Paysafe in July 2022 and is the company’s first Chief Revenue Officer (CRO). In his role, Rob is charged with spearheading Paysafe’s international sales function across a range of high growth sectors including gaming, travel, entertainment, digital assets including crypto, and fintech.
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