How Will Americans Pay in the Future?

It is a million — or perhaps six trillion — dollar question. And in a marketplace as robust and full of new innovative solutions as the payments technology industry, it is an exceedingly important one to answer for merchants and payments solutions providers alike.

A new report from online student loan refinancing marketplace LendEDU has found that Americans, already preferring electronic payments, are planning to embrace new payments innovations in the short-term and long-term.

The report found that currently two thirds of Americans surveyed say they primarily use electronic payments — debit and credit cards, mobile wallets and digital currencies — as their main form of payment. Debit cards held the plurality at 43 percent, credit cards represented 23 percent of responses and digital wallets and cryptocurrency represented just 1.7 percent. Thirty two percent – nearly a third – said cash was their main form of payment today.

However, when asked what form of payment they expect to be primarily paying with five years from now, 78 percent of respondents said that electronic payments would be their main form of payment, up from 67 percent today.

While Americans expect to be using their debit and credit cards roughly the same — 46 percent and 21 percent respectively — digital wallets like Apple Pay, Samsung Pay and Android Pay saw a massive increase in expected use, from less than one percent currently to 10 percent in the future. Concurrently, only a fifth of respondents said they expected cash to be their main form of payment in five years, an 11 percent drop.

When asked what they expected future generations to be using as their main form of payment, 28 percent said digital wallets would be the future go-to, surpassing traditional plastic cards and cash. Cash fell even further with only 11 percent indicating that cash would remain the main form of payment for the next generation of Americans, according to the report. Interestingly, nearly nine percent of respondents said virtual currency would be top dog and 12 percent said that some other form of currency not yet invented would be the future of payments.

Clearly, Americans anticipate the future of payments to be driven by electronic payments technology — in some cases technology not invented yet — and largely cashless.

The survey was commissioned by LendEDU and conducted online by PollFish, according to the report. Over a two-day span in early September 2017, 875 Americans were surveyed. The full report and methodological information can be found here.