US consumers are using no fewer than four different types of payment methods, including debit cards, cash, credit cards, digital wallets and buy now/pay later (BNPL).

JD Power’s inaugural US Consumer POS Payment Program, includes evaluations of 30 top payment brands and 11 different payment methods. It aims to deliver a detailed view of changing patterns of consumer behaviour and preference for different POS payment forms.

“The POS payment landscape is moving very quickly. Consumers are being confronted with so many different options. We’re seeing a real splintering of the total addressable market,” said Miles Tullo, MD, banking and payments, JD Power.

“Consumers now use multiple different payment options for dozens of different reasons, mostly correlated with specific needs but sometimes out of basic habit. By analysing consumer behaviour across the proliferation of different POS payment types, scenarios and consumer personas, we’re able to provide critical insights on what’s driving utilisation and what steps brands need to take to scale POS payment products.”

Key findings

Debit cards dominate the POS marketplace. Despite the widespread availability of new forms of digital payment, debit cards are used by more consumers than any other form of payment at the point of sale, with 78% of consumers indicating that they use debit cards for purchases. Debit cards are followed by cash (74%) and credit cards (66%). Digital wallets follow (36%) ahead of gift cards (33%), BNPL (28%); merchant apps (20%), cheques (19%), prepaid cards (14%), pay by bank (7%); and cryptocurrency (3%).

Typical consumer uses multiple different payment options in different scenarios. While most consumers say they use debit cards, they also say they use multiple forms of payment. On average, consumers are using 4.1 different payment methods. The reasons given for each varies considerably. These incorporate everything from ease of use to the perception of social status associated with different forms of payment.

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Over half of consumers used non-traditional payment method in the past 90 days

A slight majority (55%) of consumers say they have been using newer forms of digital payment methods, such as digital wallets, BNPL, merchant apps and even cryptocurrency. The most frequently used of these are digital wallets (36%) and BNPL (28%).

Distinct consumer segments existBased on patterns of consumer behaviour and customer satisfaction with the multiple different forms of POS payment methods, JD Power has identified six distinct consumer personas that POS payment brands can use to segment the market and target delivery of their offerings. These are experimenters, borrowers, rewards optimisers; security seekers, budgeters; and minimalists.