PAYONE-PAYMENT-CONSUMER-SURVEY: END CONSUMERS ARE DRIVING RETAILERS AHEAD

Frankfurt am Main/Vienna, 17.01.2023

PAYONE, a joint venture between Worldline, the European market leader in payment and transaction services, and the DSV Group, the payment competence center of the Sparkassen-Finanzgruppe, has conducted a representative survey in Germany and Austria among consumers between the ages of 18 and 70 on their payment habits and expectations of payment options in brick-and-mortar stores and online stores. A total of 1001 end consumers in Germany and 500 in Austria were surveyed nationwide.

Fueled by the pandemic, the technical, but also especially the associated profound social upheaval in terms of the acceptance of digital payment methods in retail can no longer be reversed. In view of the speed and diversity with which new payment technologies are constantly coming onto the market, some retailers may see the expectations of end consumers regarding how and where they want to pay as a chase.

Mapping the multi-generational payment cosmos forces retailers into a balancing act

In order to be able to map the entire, constantly changing payment cosmos, retailers are literally forced into a balancing act: They have to meet the payment experience requirements of all age groups of their clientele - whether at the POS or when making e-commerce purchases - if they do not want to lose sales or lose customers to the competition altogether. And this is not because of a lack of goods on offer, but because of a lack of preferred payment options. In order to be able to satisfy the diverse expectations of consumers in the long term, retailers must therefore continuously and consistently address the needs of their customers in order to find out which payment functions are among the "must-haves" for their customers in order to design their payment portfolio accordingly and retain their customers in the long term.

Ignorance is punished: deliberately avoiding cash-only businesses

When it comes to digital payment, the possible ignorance of retailers is punished by the end consumer, as the following study results clearly illustrate: In Germany alone, for example, 36% of 30-39-year-olds do not even visit a store where they know that only cash payments are accepted. They are followed in this attitude by the 18-29 year olds with 32%. As expected, this behavior weakens with the less digitally savvy age groups: Only 8% of 60-70 year olds, 16% of 50-59 year olds and 19% of 40-49 year olds.

The picture is similar in Austria: 24% of 18-29 year olds, 21% of 30-39 year olds, 16% of 40-49 year olds, 12% of 50-59 year olds and 13% of 60-70 year olds state that pure cash acceptance is an exclusion criterion for visiting a store or making a purchase there.

Increased purchase abandonment due to lack of desired payment method

Around 9% of respondents in Germany and 6% in Austria state that they leave a store once a week or more often without making a purchase because the retailer does not offer the payment method they want or they were unable to switch to another digital payment method due to a lack of sufficient cash. For these reasons, 15% of the German and 11% of the Austrian consumers interviewed abandon their purchase in a brick-and-mortar store once a month or more.

Preferred payment option decisive for store of choice

It comes as no surprise that 49% of German consumers surveyed say they only store in stores that allow them to pay the way they want - across all age groups. In Austria, 48% of respondents said that their preferred payment function was the decisive factor when choosing a retail store.

Consumer expectations: Everything & more

Even though cash is currently still the most popular means of payment in stores (86% in Germany, 85% in Austria) and physical cards such as the German girocard (64%) or the Austrian ATM or debit card (Mastercard/Visa) are used very frequently (82%), conventional payment methods alone are no longer sufficient to meet consumer expectations: This is evident from the results when asked about the payment options already currently perceived as desirable in brick-and-mortar stores. According to 45% of German and 46% of Austrian consumers, contactless payment via smartphone should be possible. Payment via smartphone by scanning a generated bar/QR code is desired by 27% of the German and 23% of the Austrian interview group. 24% of Germans and as many as 28% of Austrians would already like to be able to pay in stores using wearables, such as a watch or ring. Among German consumers, biometric payment methods (17% fingerprint or 11% facial recognition) are more popular than in the Austrian comparison group with 12% fingerprint and 7% facial recognition. When it comes to cryptocurrency as a common payment method, the neighboring countries are on a par with 5%.

Payment trends at the POS in 5 years

When asked how payment at the POS should develop in 5 years' time, German consumers believe that contactless card payments will slowly replace cash: 68% voted for contactless card payments, 64% for cash. For Austrians, on the other hand, cash will remain the number one means of payment in stores in five years' time, despite the desire for a wide range of payment options, with 73% in favor. What both surveyed comparison groups have in common is that payment with smartwatches/wearables (32% in Germany, 35% in Austria), payment with smartphones (32% in Germany, 27% in Austria) and biometric methods are experiencing a significant increase in the "retailer's shopping list". Cryptocurrency as a means of payment is also making a significant leap forward: 11% of German and 14% of Austrian consumers believe that this payment method should have found its way into the POS in half a decade.

Desired scenario: Smart payment world ex cash/physical cards

Quintessence: Consumers' desired scenario is a smart and wide-ranging payment world that makes carrying cash or physical cards obsolete and at the same time takes account of the latest technological developments. However, it is difficult for the majority of small and medium-sized retailers to implement this requirement in their respective payment portfolios. This does not include the payment methods that are preferred when shopping in online stores and that have experienced a huge boost due to the pandemic years.

Arriving in everyday life: Parallel use of brick-and-mortar stores and online stores

Shopping in-store and online at the same time has become widely accepted among all age groups and has become a matter of course: Consumers in both the German and Austrian interview groups stated that they regularly store in brick-and-mortar stores (91% in Germany, 94% in Austria), but also shop online with similar frequency (73% in Germany, 72% in Austria).

Online and offline functionality: expectation of hybrid & flexible payment methods

This self-image of moving in both worlds also explains why 55% of the consumers surveyed in Germany and 52% of those in Austria consider it desirable that their preferred payment method can be used equally for both in-store and online orders. And the reverse is also desirable: 39% of German consumers and 27% of Austrian consumers would already like to use online payment functions such as PayPal for their purchases in brick-and-mortar stores. In the next 1-4 years, 32% of German and even 42% of Austrian respondents expect this functionality.

Loyalty programs: Prospect of bonus points beats desire for anonymity

According to 40% of Germans and 36% of Austrians, the connection with a loyalty/discount system is very important to them. For example, 48% of Austrian and 58% of German respondents stated that the automatic crediting of bonus points at the retailers of their choice was desirable. In this context, 18% of Austrians and 32% of Germans use their loyalty card as a means of payment at the POS. (See chart 6)

This is a paradox insofar as consumers demand anonymity (29% in Germany; 33% in Austria) on the one hand, but on the other hand are willing to have their purchases rewarded with bonus points. Consumers are happy to put up with the "customer card jungle" and the mix of loyalty programs. This can be interpreted as "the prospect of rewards makes people blind". It can be assumed that this tendency towards an increased desire for customer loyalty programs set up by retailers will be reinforced by the current tense economic situation, driven by inflation and the energy crisis, among other things.

Conclusion for the retailer:

The range of payment methods and omnichannel requirements on the part of consumers pose a major challenge, especially for brick-and-mortar retailers who want to differentiate themselves from the competition through their payment portfolio. Those who do not want to rely on the scattergun principle must close gaps in their payment portfolio skillfully and with a sense of proportion and must not neglect the study "on the living object", i.e. the payment habits and related wishes and needs of their clientele.

About PAYONE

PAYONE is a leading payment provider in Germany and Austria. In stationary retail, mobile or online - PAYONE helps retailers and service providers with the challenges of cashless payment. As a full-service payment service provider, PAYONE ensures digital payment processes that work quickly, easily and reliably. PAYONE develops individual solutions for all industries and company sizes in accordance with the highest security standards.

PAYONE's pioneering omnichannel concepts help retailers to offer their customers a cross-channel shopping experience. PAYONE pursues the goal of enabling integrated payment across all touchpoints. PAYONE processes 5.4 billion transactions per year for 277,000 customers. With around 1,400 employees at four locations, the company also offers numerous value-added services that go far beyond the traditional payment business. PAYONE is a joint venture between Worldline and the DSV Group. PAYONE works throughout Europe for well-known global brands as well as for small and medium-sized companies. These include Deutsche Bahn, Rossmann, PUMA, home24 and Sansibar.

www.payone.com

About Worldline

Worldline [Euronext: WLN] is a global market leader in payments and the technology partner of choice for merchants, banks and acquirers. With over 18,000 employees in more than 40 countries, Worldline provides sustainable, trusted and secure solutions to help its customers around the world grow. The services offered by Worldline include national and international commercial acquiring for both bricks-and-mortar and online business, the highly secure processing of payment transactions and a wide range of digital services. In 2021, Worldline generated pro forma sales of just under 4 billion euros. worldline.com

Corporate purpose

We develop and operate leading digital payment and transaction solutions that enable sustainable economic growth and strengthen trust and security in our society. Our solutions are environmentally friendly and accompany everyone on their journey in the digital world

Press contact PAYONE:

Katharina Praschl
Am Belvedere 10 | 1100 Vienna
Phone: +43 1 71701 6534
katharina.praschl@payone.com