In line with our obsession to understand consumer behavior, at Banked we conducted qualitative research in the US, where we interviewed over 1000 US consumers from a wide variety of demographics. Only those respondents who had shopped online in the past month and had some level of experience with banking digitally were eligible to participate in the survey.
The study demonstrated how offering real, relevant and valued incentives that provide instant gratification is the most effective way to break a well-installed consumer payment habit.
It is no surprise that incentives are key to drive consumer acquisition in the US market, Credit Cards being among the most popular financial services in the country. Around half of the US population carry more than one Credit Card in their pockets, and are used to switching from one to another in order to maximize their rewards. As so, when we asked respondents to rank what reasons would make them try a new payment method for the first time, “Benefits and rewards” was top of the list.
The findings show that incentives have a powerful impact on behavioral choice. Those checkout screens where Pay by Bank appeared offering a reward or benefit exhibited a higher level of choice than those without them. As a matter of fact, 76% of all those who selected Pay by Bank as their payment method at checkout indicated one of the main reasons being they were offered some kind of reward or incentive. It is extremely encouraging to see that when an incentive was offered at checkout, Pay by Bank : positioned so well alongside traditional and well-established payment methods such as paying by card.
Although research explicitly demonstrated incentives are key to grab a consumers’ attention, it also suggests how important it is to educate consumers at the right point in the payment flow on; how the service works, what can they expect to happen once they selected Pay by Bank as their method of payment, and how is their financial data kept safe and secure.
Consumers were presented with three gradual screens; the first was a merchant checkout screen with a list of payment options, the second one included an incentive if the user selected to Pay by Bank :, the third one also had a short description of what Pay by Bank was and how it worked. Here, consumers were asked to rate the likelihood of selecting Pay by Bank in each of these images. The screen with the incentive performed significantly better than the one without the incentive, with a 14% increase in the likelihood of choosing Pay by Bank. The third image with the descriptor performed even better, with an additional 4% of respondents selecting they would choose to Pay by Bank, proving once again that consumer education is critical in encouraging consumers to try a new payment method.
Those respondents who still didn’t choose to Pay by Bank, were then asked to select the reasons why they didn’t do so. 86% of consumers indicated they did not do so as they were still unclear on how Pay by Bank worked and whether the payment method was secure and reliable.
This proves, once again, how in order to reach the holy grail of consumer acquisition there’s not a single encompassing solution, but rather a combination of factors that need to be taken into account. Offering relatable and personalized incentives will give a head start. Yet, making consumers feel in control will definitely help win the race.