Whether consumers have swiped, tapped, dipped, waved a wrist or held a device near a card reader at a retail location in recent months, the chances are good that they’ve used some form of digital, point of sale (POS) payment option in addition to cash.

According to new data, consumers have used no fewer than four different types of payment methods, including debit cards, cash, credit cards, digital wallets and buy now/pay later (BNPL).

The new data comes from four interconnected J.D. Power syndicated studies focused on understanding consumer preference and experience with the various forms of POS payment options: the POS Choice Satisfaction Study; Debit Card Satisfaction Study; Digital Wallet Satisfaction Study; and BNPL Satisfaction Study.

The program, which includes evaluations of 30 top payment brands and 11 different payment methods, delivers a detailed, nuanced view of changing patterns of consumer behaviour and preference for different forms of POS payment.

“The POS payment landscape is moving very quickly, and consumers are being confronted with so many different options that we’re seeing a real splintering of the total addressable market,” said Miles Tullo, managing director, banking and payments at J.D. 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 of the four 2023 studies:

• Debit cards dominate Point of Sale 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%); credit cards (66%); digital wallets (36%); gift cards (33%); BNPL (28%); merchant apps (20%); checks (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, and the reasons given for each varies considerably, incorporating everything from ease of use to the perception of social status associated with different forms of payment.
• More than half of consumers used non-traditional payment method in 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 exist: Based on patterns of consumer behaviour and customer satisfaction with the multiple different forms of POS payment methods, J.D. Power has 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 behaviour: J.D. Power has measured the financial health of consumers since 2020 and embedded those measurements into the Customer POS Payment Program. The results validate the influence consumer financial health has on POS decision-making and indicate how behaviours are likely to change with economic conditions.