Marqeta Study

Consumer Confidence in Embedded Finance and Digital Banking Providers on the Rise for Majority of Americans

The age of embedded finance and digital financial services has reached an inflection point, with new payments and shopping solutions now commonplace in the US alongside legacy systems, according to a new survey from Marqeta (NASDAQ: MQ), the global modern card issuing platform. The company’s 2023 State of Payments report released today – surveying 4,000 consumers across three continents, including 2,000 in the US – shows how consumers are working with multiple financial services providers, both traditional institutions and a range of digital payment tools and new market entrants via embedded financial services to meet their needs and provide a simple, unified and branded shopping experience.

Marqeta’s 2023 State of Payments report marks the fourth time the company has surveyed US consumers about their purchase preferences. As consumers continue to adapt to the COVID-era boom in digital innovation, the preference for a unified payment solution has grown and driven the adoption of embedded finance services. Embedded finance is defined as the integration of financial services into non-financial products, and McKinsey estimates that it will be worth $40 billion in the next three to five years in the US alone. Marqeta’s report found that US consumers are steadily increasing their use of embedded finance. Eighty-six percent of US mobile wallet users now make purchases directly through a retailer’s mobile app, with a stronger payment rewards system being a driver for the uptick. In addition, the demand for frictionless checkout was high, with 43% of respondents saying they have abandoned a purchase because it required them to download a new app or payment method.

Marqeta’s report shows the confidence that consumers have in new digital payment technology and embedded finance. Almost three-quarters (72%) of mobile wallet users shared that they would feel confident enough to leave their wallet at home, and only rely on their phone for making payments, up from 61% in 2022. Digital payment processes are becoming less daunting to users of mobile wallets as well. Ninety percent of people surveyed who use mobile wallets reported that adding their card to their mobile wallet was much simpler than they had initially thought, up from 81% in 2022. As a result, 95% of mobile wallet users surveyed reported having one or more cards loaded into their mobile wallet. Beyond this, mobile payment methods continued to rise in popularity as convenient, frictionless payments took precedence: