Typical consumer averages four payment methods at POS

TROY, Mich. — Debit cards are used by more consumers than any other form of payment at the point of sale, with 78% of consumers saying they use debit cards for the majority of their purchases, according to a report from J.D. Power U.S.

J.D. Power concluded that consumers on average tend to use at least four different methods of payment at varying times. After debit cards, the most common payment methods are cash, credit cards and gift cards, according to the report.

“Consumers now use multiple different payment options for dozens of different reasons, mostly correlated with specific needs but sometimes out of basic habit,” said Miles Tullo, managing director, banking and payments, at J.D. Power.

The J.D. Power Consumer POS Payment Program includes four syndicated studies that measure usage behaviors and customer satisfaction with 11 POS payment methods and 30 POS payment brands that offer debit cards, digital wallets and buy-now-pay-later loans. The studies captured the responses of 62,635 consumers and were fielded from April through June.

Among 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. Cash (74)%) is the second-most-common payment option, followed in order by credit cards (66%), digital wallets (36%), gift cards (33%), buy-now-pay-later (28%), merchant apps (20%), checks (19%), prepaid cards (14%), pay-by-bank (7%) and cryptocurrency (3%).

• The typical consumer uses different payment options in different scenarios: The reasons vary and include ease of use and perceptions of social status associated with different forms of payment.

• More than half of consumers used non-traditional payment method in past 90 days: Digital wallets are the most common non-traditional method that emerged from the surveys.

• Distinct consumer segments exist: J.D. Power identified six distinct “consumer personas” that POS payment brands can use to segment the market and target delivery of their offerings: experimenters; borrowers; rewards optimizers; security seekers; budgeters; and minimalists

• Financial health influences behavior: POS decision-making is not static and can be expected to change with economic conditions.