Payment preferences in the US: 2019 - 2020 snapshot

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Last editedApr 20232 min read

What if we asked you to buy what we're selling right now?

It’s too soon. This could be the first time you’ve ever come across whatever product or service we're peddling. The purchasing cycle for a new product or service, whether we’re talking about consumers or businesses, can be long and complex. Not always, but it can be (particularly within the B2B space). So you want to get it right.

There’s one factor in this process that you might be undervaluing right now - the payment experience. Amy Konary, VP of Business Innovation at Zuora and Chair of the Subscribed Institute says:

“Today’s customers expect more than just a great product… They are rejecting the traditional “one size fits all” approach and embracing personalised services… Give me what I want, when I want, how I want, is the mandate. They want the freedom to consume on their terms. Their need for freedom and choice extends to payments as well.”

By failing to account for the payment preferences of your customers, all the time and money you spend nurturing them through your marketing and sales funnel could be for nothing. Your competitors who offer them a superior payment experience - that is, a superior customer experience - are going to take your customer instead.

But if you account for payment preferences within your market, you can increase your conversion, improve customer loyalty, and ultimately reduce your churn.

Below we’ve collated payment preference data, provided by YouGov, for both recurring business payments (B2B) and recurring consumer payments (B2C) in the US.

Recurring payment preferences of US businesses

Businesses in the US demonstrate a clear first preference towards corporate cards when making recurring payments. Across four of the most common recurring payment use cases - regular business bills, invoices, digital subscriptions, and instalments - corporate card is the most preferred payment method, with a little over half of US businesses likely to use it in each case. Still, it’s not a payments panacea. Around 16% of businesses in the US are unlikely to pay by corporate card across those same use cases.

ACH payment is the second most preferred payment method, with around 40% of US businesses likely to use it in each case.

Bank transfer doesn’t see the same enthusiasm, with as few as 29% of US businesses likely to use it. However, digital wallets like PayPal are arguably least preferred as a payment method for US businesses, with more than 45% unlikely to use it in each payment use case.

Regular business bills

e.g. utility or insurance bills

Payment method	Unlikely to use	Neutral feeling	Likely to use
Corporate card	16%	27%	52%
ACH Debit	22%	28%	42%
Bank transfer	25%	29%	38%
Digital wallet	45%	21%	26%

Invoices

e.g. from accountants or marketing agencies

Payment method	Unlikely to use	Neutral feeling	Likely to use
Corporate card	14%	26%	52%
ACH Debit	22%	28%	42%
Bank transfer	26%	30%	36%
Digital wallet	44%	20%	27%

Digital subscriptions

e.g. products like cloud storage software

Payment method	Unlikely to use	Neutral feeling	Likely to use
Corporate card	16%	23%	54%
ACH Debit	27%	26%	38%
Bank transfer	31%	28%	29%
Digital wallet	44%	19%	29%

Instalments

e.g. paying off business loans

Payment method	Unlikely to use	Neutral feeling	Likely to use
Corporate card	19%	24%	50%
ACH Debit	24%	28%	38%
Bank transfer	26%	33%	33%
Digital wallet	45%	20%	26%

Recurring payment preferences of US consumers

US consumers demonstrate a strong preference for card payments - both credit cards and debit cards - across four of the most common recurring payment use cases: online subscriptions, household bills, instalments, and traditional subscriptions.

Following the preference for cards is digital wallets like PayPal, then ACH Debit.

However, US consumers demonstrate a divisive split in sentiment towards different payment methods. Although favour towards card payments is clearly the highest, there is also significant consumer sentiment against card payments, with as many as 38% of consumers unlikely to pay with them, depending on the use case.

This trend can also be seen with other payment methods.

Notably, card payments see peak consumer preference for traditional subscriptions, where 40% of US consumers are likely to use a credit card to pay for them, and ACH Debit dominates payment preferences for household bills, with 60% of US consumers likely to use the method there.

Online subscriptions

e.g. Netflix or Spotify

Payment method	Unlikely to use	Neutral feeling	Likely to use
Credit card	27%	29%	38%
Debit card	31%	28%	34%
ACH Debit	47%	24%	19%
Digital wallet	44%	25%	22%

Household bills

e.g. energy bills

Payment method	Unlikely to use	Neutral feeling	Likely to use
Credit card	38%	31%	29%
Debit card	34%	32%	30%
ACH Debit	15%	23%	60%
Digital wallet	42%	25%	27%

Instalments

e.g. car loan

Payment method	Unlikely to use	Neutral feeling	Likely to use
Credit card	29%	30%	35%
Debit card	31%	28%	35%
ACH Debit	43%	28%	22%
Digital wallet	47%	26%	19%

Traditional subscriptions

e.g. gym membership or newspaper subscription

Payment method	Unlikely to use	Neutral feeling	Likely to use
Credit card	26%	28%	40%
Debit card	31%	28%	35%
ACH Debit	48%	25%	17%
Digital wallet	45%	26%	21%

Key takeaways

The payment experience you offer your customers is a key part of your overall customer experience - don’t ignore it
Payment preference is very divisive - even payment methods which are most preferred still see a significant percentage of businesses unlikely to use them at all
No single payment method covers enough market preference to warrant ignoring the potential need for a multi-method payment strategy

Do you want to learn more about payment preferences?

Whether you’re looking to optimise conversion and reduce churn in your local market, or are expanding into international markets and want to know which payment methods reign supreme - check out our reports on the state of payment preferences today: