(London, UK): Mercedes-Benz recently announced a new partnership with Mastercard to offer embedded in-car payments using a fingerprint sensor at petrol stations in Germany. The new service, made possible via Mercedes Pay+, will be available to use at 3,600 service stations across the country, eliminating the need to enter a PIN or authenticate with a mobile device.

Though this is a world first and has created a lot of buzz around the industry, usage is limited to less than one-fifth (17%) of the total amount of service stations across Germany. Mercedes says that fingerprint payments from the car will be extended soon to other vehicle-related services and to other European markets.

“Like with all new payment technology, for it to become widely used there needs to be integration on both sides of the issuing and acquiring network” says Simon Cottenham, Head of International Partnerships at Auriemma Group. “Before contactless terminals became widely available at retailers and on public transport, contactless cards acted no differently to traditional chip and pin only models, so how and when service stations and other vehicle-related services roll out the ability to accept this innovative way to pay will be key to its success.”

Mercedes and Mastercard’s strategic, limited rollout will help inform how consumers will utilise this type of technology in the future, and how willing they are to adopt.

(London, UK): Apple announced this month that it is harnessing Open Banking APIs to deliver new features to Apple Wallet users. As part of the beta version of its iOS 17.1 update, customers can check their current account balances, transaction history and available credit directly in Apple Wallet. This will be rolled out to all customers when iOS 17.1 is officially released later in October. The current version is compatible with Barclays, HSBC, Lloyds, Monzo, RBS and Starling and is expected to expand to additional banks over time.

These improvements may further differentiate Apple Pay usage from its competitors Google and Samsung Pay. According to Auriemma Group’s latest issue of Cardbeat UK, Apple is the most popular of the bunch, with 17% of credit cardholders currently using Apple Pay, compared to 14% for Google Pay and 5% for Samsung Pay. Usage of Apple Pay notably rises to 47% among those ages 18-34.

The use of Open Banking APIs gives cardholders yet another reason to leave their wallets at home. Research from global card issuing platform Marqeta found that 73% of mobile wallet users feel confident enough to “leave their wallet at home, and only rely on their mobile phones for making payments.”

“Apple’s latest integration is another positive step for Open Banking and mobile wallet usage in the UK,” says Simon Cottenham, Head of International Partnerships at Auriemma Group. “Where previously one could view their Santander current account balance within their HSBC app, Wallet is a centralised app that is already used by millions of UK consumers today. As ever with Open Banking technology, compatibility with a broad reach of banks is key to its customer appeal and success, so Apple should focus on broadening its reach while it is ahead of the curve.”

Auriemma Group will continue to monitor this space closely in upcoming Cardbeat studies.

Survey Methodology

This Auriemma Research study was conducted online within the UK by an independent field service provider on behalf of Auriemma in July 2023, among 801 adult credit cardholders. The number of interviews completed on a monthly basis is sufficient to allow for statistical significance testing between sub-groups at the 95% confidence level ± 5%, unless otherwise noted. The purpose of the research was not disclosed nor did the respondents know the criteria for qualification.

(New York, NY) Artificial intelligence (AI) continues to expand, with recent advancements in the technology being offered directly to consumers. The capabilities of AI chatbots, like ChatGPT, raise questions about the future of AI, and its integration into banking and payment experiences. Auriemma Group’s latest issue of The Payments Report reveals current usage levels of AI chatbots, comfortability with AI solutions being utilized by banks and retailers, and how likely consumers are to turn to AI chatbots for financial advice.

ChatGPT is still in its infancy, but 15% of debit cardholders have used it. Importantly, this represents a 68% take-rate among those familiar with the service. Other providers, such as Google’s Bard, DiabloGPT, and YouChat all boast similar take rates, according to Auriemma’s research.

While the casual ChatGPT user may prompt the service to help write an email or provide information on a topic, the AI language model can also provide financial support. This would be welcomed by 40% of cardholders who reported that they are likely to use an AI chatbot for financial advice, up 6-percentage points compared to Q4-2022. And this figure rises for Gen Z and Millennial cardholders, 60% of whom would be comfortable.

“Cardholders are broadly aware that AI is imbued in some of their bank’s automated offerings,” says Jonathan O’Connor, Senior Manager at Auriemma. “But the question is how banks can use AI to further support their offerings in smart ways. Some applications of the technology would be more welcome than others.”

Unsurprisingly, exposure to AI integration within certain tools appears to increase comfortability. According to Auriemma’s research, 62% of debit cardholders would be comfortable with an AI solution offered by their primary bank aimed at identifying potential fraud. Slightly fewer say the same about using AI to provide customer service (52%), assess credit worthiness (47%), or predict stock prices (45%).

Over half of consumers would also welcome AI solutions offered by retailers they shop with frequently. Cardholders are most comfortable with retailers using AI for fraud leads (64%), followed by price comparison tools (64%), customer service (53%), and personalized shopping recommendations (52%).

“For banks, the most immediate use case for AI is to support financial health initiatives,” says O’Connor. “Cardholders are already accustomed to chatting with AI to help solve straightforward issues. Utilizing the technology to connect cardholders with solutions or resources aimed at alleviating financial strain or enabling smarter spend decisions is a clear next step.”

The proliferation of AI chatbots creates an opportunity for banks and retailers to expand their offerings. Services like ChatGPT raise overall consumer awareness with AI’s capabilities and could increase comfortability with the technology being used by other providers they trust. As these services grow and increase in popularity, it will be important for banks to keep up should they want to continue to be cardholders’ primary destination for financial advice.

Survey Methodology

The Payments Report

This Auriemma Group study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) in March 2023 among 800 adult debit cardholders. The number of interviews completed for both is sufficient to allow for statistical significance testing among sub-groups at the 95% confidence level ±5%, unless otherwise noted. The purpose of the research was not disclosed, nor did respondents know the criteria for qualifying.

About Auriemma Group

For more than 35 years, Auriemma’s mission has been to empower clients with authoritative data and actionable insights. Our team comprises recognized experts in four primary areas: operational effectiveness, consumer research, co-brand partnerships, and corporate finance. Our business intelligence and advisory services give clients access to the data, expertise and tools they need to navigate an increasingly complex environment and maximize their performance. Auriemma serves the consumer financial services ecosystem from our offices in New York City and London. For more information, call Jonathan O’Connor at (+1) 1-646-437-6116.

(New York, NY) Mobile payments give cardholders the chance to lighten their physical wallet, but those in states like Arizona and Maryland may be able to go without a wallet altogether. In March, Apple announced that Arizona would be the first state to offer its locals the opportunity to digitally store their driver’s license or state ID in the Apple Wallet, and Maryland soon followed. But what impact, if any, will this have on mobile payment usage overall?

Auriemma Group’s latest Mobile Pay Tracker study found that ID provisioning could increase mobile payment usage notably. According to the research, 67% of mobile payment users and 20% of non-users would be interested in adding an ID to their mobile wallet. And nearly half of those interested say having an ID available in their mobile pay wallet would make them use it more. This is particularly striking among non-users, 45% of whom would begin using mobile payments as a result.

“With the addition of IDs, mobile wallets take one step closer to being a physical wallet substitute,” says Jaclyn Holmes, Director of Research at Auriemma Group. “Though we don’t anticipate mobile wallets to fully replace physical ones, this addition will make leaving home without one a greater possibility should your state provide the option.”

However, mobile payments have some work to do if they want to convert naysayers. 62% of those uninterested in adding an ID to their mobile wallet say they don’t like the idea of having all their personal information saved to one device, and 50% don’t think it would be secure. Over half of these cardholders also don’t trust mobile wallets enough to leave their physical ID at home, saying they would still carry it with them anyway.

When looking at those interested in adding their ID to a mobile wallet, however, 69% are comfortable leaving their physical ID behind. This is most prominent among younger cardholders, suggesting that over time comfort may increase.

“Mobile payments already allow consumers to add their payment cards, plane tickets, membership cards, and more,” says Holmes. “Adding IDs is the next logical step and is likely to promote mobile payment usage overall. As issuers consider their relationship to mobile payments, it would be worthwhile for them to envision a future where digital wallets are more commonplace, even if only supplemental to the physical wallet.”

Survey Methodology

Mobile Pay Tracker

This Auriemma Group study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) in July 2022 among 2,182 adult mobile pay eligible credit cardholders. The number of interviews completed for both is sufficient to allow for statistical significance testing among sub-groups at the 95% confidence level ±5%, unless otherwise noted. The purpose of the research was not disclosed, nor did respondents know the criteria for qualifying.

(New York, NY) Bitcoin has been around for over a decade but continues to find its footing with consumers less familiar with it. Famously first used to purchase Papa John’s pizza in 2010, the cryptocurrency’s value has grown from $725 in 2015 to over $64,000 as of this writing, creating some investment winners and losers along the way. Auriemma Group’s latest issue of Mobile Pay Tracker investigated consumers’ relationship with Bitcoin and cryptocurrency in general, uncovering who knows about it, who has it, what they’re using it for, how they’d like to use it in the future, and more.

1. Lack of understanding prevents cryptocurrency ubiquity.

Cryptocurrency has captured mainstream attention since its launch, but few consumers truly understand how it works—74% say they are a cryptocurrency novice. While some may be able to speak about it generally, its unlikely your average cryptocurrency holder is explaining the blockchain to their friends. Overall, though, nearly everyone (96%) has at least heard of cryptocurrency, highlighting just how culturally significant it has become during its relatively short tenure.

“As a payments ecosystem, cryptocurrency will need to become more widely understood for it to truly flourish,” says Jaclyn Holmes, Director of Research at Auriemma Group. “But low levels of understanding may be enough for a casual investment, even if the currency is far from becoming the decentralized alternative to cash.”

2. About one-in-six consumers currently own a cryptocurrency.

Age plays a notable role in cryptocurrency ownership, with some Gen X and Baby Boomer consumers likely hesitant to use it as an investment vehicle due to its volatility. With more time to absorb the ebbs and flows of the market and more openness to emerging payment types, Gen Z and Millennial cardholders are more likely to hold cryptocurrency (25%-30%).

“Not only do younger cardholders have the advantage of time when it comes to cryptocurrency investing,” says Holmes. “The group is also generally more open to novel technologies and approaches in the payments space. We’ve seen it with mobile payments, P2P payments, contactless technology, and more.”

Still, without high levels of understanding, 57% of those who own cryptocurrency say it comprises less than one-quarter of their overall savings/investment portfolio. Though thousands of cryptocurrencies are in circulation, Bitcoin, Dogecoin, and Ethereum are the most owned among consumers (7-11%).

3. Those with cryptocurrency want more.

Looking ahead, one-quarter of consumers are interested in buying or receiving cryptocurrency in the next 12 months. This figure increases to 81% among those who currently hold cryptocurrency. Even those who used to hold cryptocurrency show increased interest (49%), which exemplifies the largely positive experience those who have ever held it have had with the product.

“While traditionally bought and sold proactively, we’ve noticed passive opportunities for cryptocurrency acquisition sprouting up across the payments space. Venmo, for example, now allows its users to redeem their funds for Bitcoin, Ethereum, Litecoin, or Bitcoin Cash,” says Holmes. “It wouldn’t be surprising if it became a common redemption option for credit card rewards programs.”

In fact, cryptocurrency as a cash back reward is of interest to one-third of consumers, while those who currently hold cryptocurrency are even more interested (75%). That isn’t to say cryptocurrency rewards will become table stakes, but they could certainly become a program sweetener, particularly for younger cardholders looking for a low-risk way to participate in the space.

4. It’s considered a long-term investment, not liquid funds.

Though cryptocurrency can sometimes appear to be a get-rich-quick scheme, the reality is that those who hold it broadly think of it as a long-term (38%), not a short-term (13%) investment. Still, knowledge remains key. Losing the errant dollar to a defunct cryptocurrency may not change one’s financial future, but an overzealous investor could lose a lot of money quickly, like this Shanghai investor who purchased Squid Game crypto.

“Some consumers simply play around with cryptocurrency to see what happens, but this could become a high-risk endeavor for those offering up their life savings,” says Holmes. “Issuers can play in this space by offering their cardholders the opportunity to buy into cryptocurrency without such a large price tag—using rewards points to purchase smaller portions of trusted cryptocurrency providers.”

Without the infrastructure to accept cryptocurrency as a form of payment at the point-of-sale, it will largely be seen as an investment product. Few (14%) see cryptocurrency as liquid funds for purchases, but if presented with the option to use theirs for a purchase at the point-of-sale, about half are likely.

Why should banks care about cryptocurrency?

While cryptocurrency is still relatively new and transaction volume remains low for the industry, it is undoubtedly a growing space. Those looking to play in the space will need to remain conscious of evolving regulation to ensure compliance needs are met. Still, banks and issuers can act as a refuge for consumers looking to dip their toe in without the exposure that comes with committing their hard-earned dollars to the investment. Providing cardholders the option to earn or redeem their account rewards as cryptocurrency allows them to passively participate in the space in a way that feels lower-risk, particularly for those new and just looking to play around.

Survey Methodology

Mobile Pay Tracker

This Auriemma Group study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) in July 2021 among 2,003 adult mobile pay eligible credit cardholders. The number of interviews completed for both is sufficient to allow for statistical significance testing among sub-groups at the 95% confidence level ±5%, unless otherwise noted. The purpose of the research was not disclosed, nor did respondents know the criteria for qualifying.

About Auriemma Group

For more than 35 years, Auriemma’s mission has been to empower clients with authoritative data and actionable insights. Our team comprises recognized experts in four primary areas: operational effectiveness, consumer research, co-brand partnerships, and corporate finance. Our business intelligence and advisory services give clients access to the data, expertise and tools they need to navigate an increasingly complex environment and maximize their performance. Auriemma serves the consumer financial services ecosystem from our offices in New York City and London. For more information, call Jaclyn Holmes at (+1) 646-454-4200.

(London, UK) Issuers are building out digital offerings as COVID-19 continues to curtail opportunity for in-person servicing. Auriemma Group’s latest issue of Cardbeat UK found that 42% of those who interacted with a bank branch since November 2019 haven’t used the channel again since the pandemic began. While cardholders are leaning more heavily on digital solutions, many still expect a diversity of options. Are issuers meeting their cardholders’ needs, and what would improve the customer service experience today?

Auriemma’s research found that sustained channel usage through the pandemic is most prominent for digital options. Just under nine-in-ten cardholders who used mobile apps (87%) or online portals (86%) to interact with their issuers prior to COVID-19 say they continued to use that channel since the outbreak began, while phone (74%) and bank branches (58%) saw lesser continued use.

While many issuers have numerous communication options available to their cardholders, this shift in channel usage has propelled them to reassess operational needs. Auriemma’s roundtables discussed how digital servicing has become a top priority since the pandemic began, noting that the cost of delivery, training, and staffing considerations inform which measures are taken.

“Overall, issuers are doing what they can to reorient their strategies to meet the changing needs of their cardholders, and they’ve been largely successful” says Jaclyn Holmes, Director at Auriemma Group. “Three-quarters of cardholders who interacted with an issuer both before and since COVID-19 say the customer service experience is about the same, and those who feel it has improved most often point to the strength of the human element—problems are solved more easily, solutions are flexible, and agents appear more empathetic.”

Notably, 17% of this group do say that the customer experience has gotten worse, with longer wait times (71%) most often to blame. However, these cardholders also say there are fewer options for contacting their issuer (38%) and that getting answers or solutions to their questions has become more difficult (32%).

“Ensuring customers have a variety of communication channels to choose from is clearly important, however not at the cost of speed to resolution,” says Holmes. “Issuers deciding how to allocate their resources are tasked with providing diverse options, while staffing them with an eye towards contact patterns and traffic expectations.”

One way that firms are trying to meet customer need without overburdening their resources is through self-servicing options. Auriemma’s roundtables found that many issuers have promoted the use of digitised forms for disputes, complaints and payment holidays. These options yield high customer use and provide issuers with efficiency gains.

And cardholders broadly react positively to these types of options. Auriemma’s research found that the vast majority of cardholders are comfortable completing financial actions via digital channels. This is particularly true of more common tasks like checking account balances (90%), making a payment (89%), updating contact information (88%), transferring funds (86%) and requesting new cards (85%).

“Providing self-service options has a two-fold benefit—cardholders have quick access to solutions for common questions and issuer resources become more readily available for more complex customer needs,” says Holmes. “Looking forward, providing the right allocation of resources towards self-service, chat bots, and live representatives, either in chat or on the phone, will be key to cardholders continued satisfaction with issuers channel offerings.”

Survey Methodology

Cardbeat UK

This Auriemma Group study was conducted online within the UK by an independent field service provider on behalf of Auriemma in November 2020, among 845 adult credit cardholders. The number of interviews completed on a monthly basis is sufficient to allow for statistical significance testing between sub-groups at the 95% confidence level ± 5%, unless otherwise noted. The purpose of the research was not disclosed nor did the respondents know the criteria for qualification. The average interview length was 21 minutes.

About Auriemma Group

For more than 30 years, Auriemma’s mission has been to empower clients with authoritative data and actionable insights. Our team comprises recognised experts in four primary areas: operational effectiveness, consumer research, co-brand partnerships, and corporate finance. Our business intelligence and advisory services give clients access to the data, expertise and tools they need to navigate an increasingly complex environment and maximise their performance. Auriemma serves the consumer financial services ecosystem from our offices in London and New York City. For more information, call Jaclyn Holmes at +44 (0) 207 629 0075.

Though users of Click to Pay tend to use the service more than once, PayPal continues to be the preferred pay button. PayPal has a slight edge over Click to Pay among Click to Pay users, but non-users express a strong preference for PayPal.

Much like contactless card usage, Mobile Pay adoption grew in 2020. According to Auriemma’s Wave 3 issue of Mobile Pay Tracker, 40% of those eligible to use mobile payments report doing so, level with the all-time peak reported in W2-20.

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