Raynor de Best
Content expert covering payments and (crypto)currencies
Digital payments landscape in the United States - statistics & facts
Digital payments in the U.S. are centered around the use of credit cards – with alternative payment methods like wallets and BNPL being the main challengers. This is especially noticeable in U.S. e-commerce, where mobile wallets are already a preferred payment method. It is expected that cards will remain a dominant digital payment for in-store transactions for longer, as they accounted for seven out of 10 transactions in 2021. Fear of growing credit card delinquencies may impact future developments and further entice U.S. consumers to use buy now, pay later products in 2024 and beyond.
Digital payments refer to any form of cashless payment or payments conducted without banknotes or coins in either an online or offline environment. This can include mobile payments (digital payments performed with a mobile device), fintech (such companies tend to be at the forefront of payment digitalization), or relatively young trends like buy now, pay later (BNPL) or cryptocurrency. Out of all these cashless options, which developments are noteworthy to know about for the United States?
Digital payments refer to any form of cashless payment or payments conducted without banknotes or coins in either an online or offline environment. This can include mobile payments (digital payments performed with a mobile device), fintech (such companies tend to be at the forefront of payment digitalization), or relatively young trends like buy now, pay later (BNPL) or cryptocurrency. Out of all these cashless options, which developments are noteworthy to know about for the United States?
The growing need for BNPL regulation in the U.S.
A major topic following the cost-of-living crisis in the U.S., buy now, pay later solutions attracted many potential users in the United States. Most U.S. respondents considered using BNPL because of inflation or out of necessity. Buy now, pay later lending does not follow the same rules as other types of consumer loans in many countries. This led to a warning from the Consumer Finance Protection Bureau (CPFB) in March 2023, as a lack of consumer information and regulatory oversight could lead to a higher BNPL debt delinquency among the U.S. population. An age comparison of BNPL use in the United States over time reveals how usage has shifted since the cost of living crisis: In June 2022, respondents ages 18 to 24 were the most likely users of BNPL. By June 2023, this had shifted completely to older age groups. As of March 2024, new regulation for the loan type was still pending in the U.S.FedNow, Venmo, and U.S. real-time payments
Launched in the summer of 2023, industry experts commented that "Fed Late" was perhaps a better name for the US Federal Reserve's instant payment scheme FedNow. The United States ranks relatively low when it comes to real-time payments. Transactions in Nigeria are being almost twice as high as in the U.S., for example. Unlike UPI in India and Pix in Brazil, FedNow was not aimed at consumers but at banks. U.S. banks, however, struggled with potential fraud issues in FedNow. The United States' main real-time payment brands for consumers are Venmo and Zelle. Venmo, especially, grew quickly among consumers, with its TPV outpacing that of its parent company PayPal.
