New research from the Paze PulseSM Report, by Early Warning Services, revealed that over the past year, 71% of online shoppers have abandoned their online shopping carts. While an overly complicated checkout process and security concerns were among the top reasons for cart abandonment cited in the inaugural Paze PulseSM Report: Consumer Online Shopping Preferences, 72% of consumers surveyed report they highly value digital payment tools like digital wallets.
“The road to better online checkouts is improved with features that expedite and simplify the process,” said James Anderson, managing director of Paze. “In today’s challenging e-commerce landscape, the findings from our ‘Paze PulseSM Report: Consumer Online Shopping Preferences’ research emphasize the need for secure and convenient ways to make purchases online. This research indicates strong consumer interest in using an online checkout solution, offered by banks and credit unions, and validates our direction with Paze as we prepare for its general availability this year.”
The research revealed four key trends regarding consumer preferences and the use of online digital payments.
Consumers have an appetite for a financial institution-backed digital wallet
There is a notable receptivity to bank-offered digital wallets, particularly among frequent digital wallet users. In fact, almost half of shoppers (44%) would use a digital wallet provided by their bank over guest checkout if given the option.
“The trust consumers place in their financial institution is unparalleled,” Anderson said. “With 44% of shoppers leaning towards a digital wallet from their financial institution, we recognize the desire for security and reliability. Establishing trust and aligning with consumer expectations is not just a competitive advantage but a fundamental necessity for retailers and e-commerce platforms.”
Further, respondents consider their banks to be more secure than third-party providers, as 82% of consumers report trusting their bank’s safety and security more than third-party payment options.
Fifty-eight percent of digital wallet users said they would switch to a bank- or credit union-offered digital payment tool if their financial institution kept their card information updated.
Digital wallet setup presents a hurdle for consumer use
The findings suggest an opportunity exists for preloaded digital wallets, as nearly half (41%) of shoppers report they would use a digital payment tool if it was set up already, but they revert to guest checkout because it seems easier.
A similar percentage of “frequent” digital wallet users (43%) and non-digital or infrequent digital wallet users (39%) report the same.
Security and convenience are driving factors for payment choice
Consumers prioritize security and convenience when making online purchases, influencing their choice of payment method. Sixty-seven percent of consumers list a secure checkout process as one of the top three most important factors they look for when shopping online.
While some favor the ease of digital wallets, others opt for guest checkout due to concerns about security or the perceived complexity of setup. Among users of digital wallets, 85% assume their digital wallets are safe, a slightly higher percentage than the number of consumers that perceive manually entering payment information (guest checkout) is safe (79%) and those that perceive using an app from a retailer or business is safe (75%).
Shoppers use a variety of digital payment methods
Online shoppers use a variety of digital payment tools for their online purchases, with 91% of consumers reporting frequent use of digital payments for checkout, like keeping their card information stored with a merchant, within a web browser or using a digital wallet.
Sixty-four percent of consumers value shopping online with merchants that offer multiple ways to pay.
However, a significant number of shoppers still opt to manually input their payment information at checkout, with 75% of respondents frequently manually entering card information at online checkout, which can be a time-consuming and error-prone process.