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Consumers turn to big tech, neobanks for payments

Rick MorganbyRick Morgan
October 9, 2020
in Payments
Reading Time: 2 mins read
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The COVID-19 pandemic is changing how consumers make payments, according to consulting firm Capgemini’s World Payments Report 2020. Since April, over 38% of consumers found a new payments provider during the pandemic and are considering a more permanent switch, the report said.

“COVID-19 has accelerated the rate of innovation within the payments space to quickly form the ‘next normal,’ requiring payments firms to be digital masters almost overnight,” said Anirban Bose, CEO of Capgemini’s financial services and group executive board member, in a statement. “Payments providers need to deliver differentiated offerings that emphasize speed, convenience, and a superb end-to-end customer experience.”

Health concerns during the COVID-19 pandemic pushed many consumers to adopt what are considered safer payment methods. According to the report, 30% of consumers have turned to a big tech company like Google and Apple for payments, and 50% are using a neobank. 

Capgemini’s World Payments Report 2020

Even customers who prefer cash are seeking new payment methods, according to Capgemini. The report found 41% of consumers who often use cash tried a contactless card during the pandemic, while 35% of heavy card users tried a digital wallet. QR codes gained popularity as well, with 27% of consumers trying them during the pandemic. According to Capgemini, noncash transactions are on pace to hit $1.1 trillion worldwide by 2023.

The report surveyed over 8,600 consumers across 44 markets during the recent summer. Respondents were over 18 years old and came from North America, South America, Asia, Europe, the Middle East and Africa.

See also: Touchless payments are here to stay, Amex says

Payments apps are growing in popularity in the U.S. According to recent data from the mobile analytics platform App Annie, P2P payment apps like Cash App and Venmo are some of the fastest growing fintech apps in the U.S. 

“Consumers are looking to mobile for more than just merchant payments,” Lexi Sydow, senior markets insight manager at App Annie, wrote in App Annie’s Mobile Minute report. “We’ve seen that payments apps are top of mind for consumers, including peer-to-peer transfer apps Cash App, Venmo and Zelle seeing strong growth in downloads in Q2 2020.”

The 2020 Banking Automation Summit Virtual Experience, taking place November 9-10, is a new event that will provide a platform for industry professionals to share fresh insights, tools, trends and strategies. The Summit will focus on how automation will transform banking, especially with regard to back-office operations, risk management, data science and utilization, customer experience and more. Register here. 

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