New research: Modern payment solutions rise during COVID-19 Part Three of Marqeta’s 2020 State of Payments Report, a survey of 2,006 U.S. consumers

When COVID-19 landed on our shores earlier this year, consumers responded by quickly adjusting their purchasing habits. According to our survey results, the search for ways to make safe and contact-free purchases resulted in a sharp rise in the adoption of digital payment solutions that allow for convenience and flexibility.

Our recent survey of 2,006 U.S. consumers reveals that 65% of consumers have made a purchase on a platform, app, or in a store for the first time since the pandemic began, further proving a shift to digital payment solutions, many of which are built on modern infrastructure.

A modern infrastructure enables these solutions to provide an influx of new customers with seamless shopping experiences throughout the pandemic. Modern card issuing enables payment solutions — including peer-to-peer payment platforms, on-demand delivery services, and Buy Now, Pay Later solutions — to scale to better meet the demand of their growing customer bases.

Peer-to-peer payment solutions take flight as the payments economy turns digital

As the anniversary of the pandemic approaches, consumer use of payment solutions with flexible capabilities has solidified. Use of peer-to-peer payment platforms, which allow consumers to send and receive payments directly to friends or family within minutes, almost doubled compared to 2019. Seventy-seven percent of consumers surveyed said they used a peer-to-peer payment app in 2020, compared to only 42% in 2019.

When digging deeper into which peer-to-peer payment apps had the largest adoption, Cash App was the most popular among those surveyed, ahead of both Venmo and Zelle. Thirty-two percent of survey respondents reported using Cash App, compared to 26% for Venmo, and 20% for Zelle.

The magnitude of options available to consumers, combined with their speed and ease of use, all but ensures that we can expect adoption numbers to stay high after COVID-19. The vast majority of consumers (89%) said they expect to use their peer-to-peer apps with the same frequency as they do now.

On-demand delivery services become essential during the pandemic

On-demand delivery services, including Instacart, DoorDash, and Postmates, provided consumers with fast, convenient, and safe ways to shop for groceries and food throughout the pandemic. According to our survey, convenience (54%) and safety (50%) were the biggest motivators for on-demand delivery adoption during 2020. While not surprising, this shows why consumers are more open to new technologies now compared to prior years.

The increase in adoption for on-demand delivery services is significant. Sixty-three percent of consumers say they have used a delivery service to order food in 2020, compared to 32% in 2019, an increase of 100% year over year. This means that almost twice as many people have started using on-demand delivery services within the span of only one year.

The need to keep up with consumer demand appears essential for these businesses both now and in the future. Some insights that support this include:

  • 77% of people have increased their on-demand delivery orders to some degree since the pandemic began
  • 53% of consumers say they use an on-demand delivery service weekly, if not multiple times per week
  • 62% of consumers plan to use on-demand delivery services with the same frequency after COVID-19

On-demand delivery services became a staple in many U.S. households in 2020, and our survey suggests that their popularity and use will remain high, even after a vaccine becomes widely available.

Buy Now, Pay Later platforms boom as consumers look for flexible payment options

While Buy Pay, Pay Later (BNPL) solutions were growing in popularity before the pandemic, in the last year the use of BNPL has spread among older and more affluent demographic groups. Consumers can apply for BNPL approval at the point of sale and make their purchase within minutes. Whether consumers are looking to purchase new home improvement items for their quarantine projects or stay active with a Peloton bike, Buy Now, Pay Later services are increasingly the payment method of choice. More than one-third of all consumers surveyed (37%) say they have used a Buy Now, Pay Later service and 74% of these consumers have used it for the first time since COVID-19 began.

Buy Now, Pay Later services have become an increasingly important consumer fixture in 2020, with additional insights from the survey to support this:

  • 80% of Buy Now, Pay Later users said they have increased use to some degree since the pandemic began
  • Convenience (55%) and flexibility (48%) motivated them to use a Buy Now, Pay Later service
  • Almost 1-in-5 users (18%) say they used a Buy Now, Pay Later service because they don’t have other access to credit

With consumers seeking greater payment flexibility during the current economic downturn, Buy Now, Pay Later services allow them to pay in installments without incurring interest fees. The benefits have attracted consumers who are looking for a differentiated shopping experience that is convenient, simple, and fast.

Consumers appear drawn to digital payments to make purchases, and our survey shows that COVID-19 has accelerated their adoption nationwide. The new payment landscape is one where consumers have options and are able to shop safely through flexible and secure payment solutions. Find out how Marqeta’s modern card issuing platform provides the infrastructure to support peer-to-peer payment platforms, on-demand delivery services, and Buy Now, Pay Later solutions as they scale globally to address consumer demand in the wake of COVID-19.

Read parts one and two of our 2020 State of Payments Report detailing mobile wallet adoption and holiday shopping forecasts.