US Payment Research

Summary:

-Payment could be benefit from cashless society transformation in long run according to the research conducted by both Square and Master

-Master continue to see the transition from the Stabilization phase to the Normalization phase in most markets domestically. The Stabilization phase is characterized by spending stabilizing around new lower levels as a result of compliance with social distancing and mobility limitations. The Normalization phase occurs when these restrictions are relaxed and spending begins to gradually recover from the new lower levels, with some sectors recovering faster than others.

MASTER:

-In store, a massive move away from cash: Globally, almost seven in 10 consumers say the shift to digital payments will likely be permanent, and nearly half of consumers plan to use cash less, even after the pandemic subsides, according to a Mastercard weekly survey launched April 27.

-e-commerce has reached new heights. Mastercard SpendingPulse1, which measures retail sales across all payment types including cash and check, shows that United States e-commerce spending grew by 93 percent year-over-year in the month of May. And in April and May, e-commerce as a share of total retail sales reached 33% in the United Kingdom – an unprecedented high (ex. auto, petrol and restaurants). Note that e-commerce follows the Census definition*.

-According to Mastercard SpendingPulse, more money was spent online in the U.S. between April and May than the last 12 Cyber Mondays combined.)

-Total retail spending through e-commerce channels accelerated for eight continuous weeks between March 21 through May 9 – an unprecedented climb nearing 100% growth year-over-year.

-As of May 30, 19 U.S. states eased stay-at-home orders with 14 fully ending these measures. While we are in the early innings, we are seeing corresponding week-over-week deceleration in e-commerce growth for three consecutive weeks contemporaneous to the easing of restrictions

Square:

-On March 1, 8% of U.S. Square sellers were effectively cashless*; 54 days later, on April 23, the number of cashless businesses had skyrocketed to 31%.

-Prior to COVID-19, it took four years for the share of card usage in the U.S. to rise nine percentage points, from 54% to 63%. But in just one month during the COVID-19 pandemic, card usage for $10 to $20 transactions in the U.S. increased two percentage points, from 71% card on April 1 to 73% card on April 29. By comparison, it previously took five months* for the share of card payments to rise two percentage points(b1)

-The worldwide impact of COVID-19 is reflected in global payments trends, well beyond the US and in each of Square’s markets. We compared the share of businesses that are taking 95% or more card payments from Japan to the UK, to see how each country compares before and after peak pandemic.(b2)

-69% of small business owners say it is likely that the ongoing COVID-19 outbreak will accelerate the adoption of cashless transactions in the U.S.