With newfound enthusiasm for contactless transactions amid the pandemic, consumers’ preference for mobile wallets is growing undeniably — but not evenly, according to PYMNTS’ latest data. PayPal dominates in almost every category measured: shopping online, shopping in-store, by gender and by generation, it has a commanding lead in almost every market.
At its peak this spring, PayPal’s mobile wallet has powered 28 percent of in-store mobile transactions, while its nearest competitor, Apple Pay, never did better than 15 percent. And online — PayPal’s home court, so to speak — the difference is even more pronounced, as its mobile wallet peaked just short of a full half of all online transactions at 48 percent, while Apple and Google Pay struggled to reach and stay above 11 percent.
As of yet, the only competitor getting close to PayPal, according to PYMNTS’ figures, is Apple Pay — and that’s only in a single (but valuable) demographic category: affluent consumers.
Mobile Growth by the Numbers
Mobile usage has been elevated during spring 2021 when compared to the same time last year, but it has bounced up and down a bit during that time period — particularly with the two most-used mobile wallets, Apple and PayPal.
The online shopping results reveal a similar up-and-down pattern that is most pronounced among segment leader PayPal. Its lead was more commanding online, with 47 percent of users reporting PayPal as their online shopping wallet of choice at its peak at the end of March 2021, compared to Apple’s peak result of 15 percent of online shoppers and Google Pay’s peak at 11 percent.
Moreover, the data shows, the preference for PayPal extends through every demographic group. PayPal was used for in-store shopping by roughly a quarter of Gen Xers and about a third of millennials, bridge millennials and Gen Z members. Apple Pay didn’t get close, only breaking 20 percent use with Gen Z consumers, while Google only broke 10 percent with bridge millennials and millennials.
The same use patterns tip more dramatically to PayPal online, where 43 percent of consumers reported using the PayPal Wallet to shop, compared to 9 percent who reported using Apple Pay and 9 percent who reported using Google Pay.
PayPal is nearly universally dominant in all categories — more than 10 percent ahead of its more direct competition in the market — in every place but one. Affluent consumers (those earning more than $150,000 a year) still prefer PayPal, with 18 percent using it to shop in-store. However, the margin is much less wide in this category, as 13 percent of affluent consumers reported using Apple Pay. This is, notably, an in-store-only phenomenon — PayPal dominates Apple Pay online, with 41 percent of affluent consumers tapping into it compared to Apple Pay’s 11 percent.
But given the direction of the rest of the data, getting within striking distance of PayPal in any category is an achievement.
Will PayPal be able to hold onto its lead as the segment gets more competitive? It’s a tricky question for market watchers looking to sketch the path forward. Debit and credit cards — as well as digital wallets — have seen net increases in use since the pandemic began, as consumers are reconsidering their needs and branching out to new payment experiences that best meet them.
“Consumers’ needs change over time, and products change over time. And we are seeing the utility of some of these alternate payment methods increasing,” Elan Senior Vice President and Head of Credit Card Product Development Chris Roncari noted in a recent conversation with Karen Webster and BECU Chief Credit Officer Shahzad Kazi.
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