Lines and Cash Are Two Big Payment Pain Points for Consumers

PayPal recently released survey data on e-commerce and mobile payments. There were more than 15,000 respondents from a range of countries: Australia, Brazil, Canada, China, France, Germany, Israel, Italy, Japan, Russia, Singapore, Spain, Turkey, UK and the US.

The survey identifies arguably the two major offline payments "pain points" for consumers: 1) waiting for their payments to be processed (or waiting in line) and 2) having enough cash on hand (less true in Western markets).

Payments pain points paypal

PayPal found that the hierarchy of "can't leave home without" items was as follows:

  • Keys -- 34%
  • Phone -- 24%
  • Credit cards -- 21%
  • Cash -- 20%

The survey also asked about friction or frustrations with to e-commerce: "Which of the following, if anything, annoys you about online payments?"

 E-commerce pain points

The responses vary by country but this is the list: 

  • payment security
  • registration requirements
  • hidden charges/taxes
  • entering credit card numbers
  • malfunctions in the middle of transaction
  • passwords and pin numbers

The survey also inquired about time spent shopping -- this is self reported data but with a roughly 1K per country sample. The question asked how many hours per week were spent shopping offline vs. online.

In China more time was spent online and in Brazil the time spent was identical (very hard to believe). The UK is nearly 1:1 but the US favors offline by about 2.5X. I would take these numbers not as actual but as directional indications of time spent. For example, is grocery shopping included here? It's not clear.

 Time spent shopping online vs. offline

In my view the most interesting findings are reflected in the top chart about the challenges and frustrations of traditional offline payments. There's great opportunity in minimizing payment wait times and enabling people to avoid lines. This is starting to happen as in-app/mobile payments are currently being deployed in fast-food and "fast-casual" restaurants and in a few fine dining establishments with the OpenTable app.  

Retailers also have a major opportunity with mobile payments. Loyalty and payments are two features that would help them generate app downloads and repeat usage. It would also provide them with additional tracking tools, not to mention "closed-loop" ways to market to their customers. 

Currently most retail apps are sort of mini e-commerce sites. By contrast, they need to create apps that either contemplate the majority of usage being nearby and in-store, and make changes to the user experience accordingly, or have context-sensitive apps that can change when a user comes into a store.