Marqeta, the global modern card issuing platform, has released its first Consumer Pulse Report. The report is based on the findings of a February 2023 survey of 4,000 consumers across the UK, US, and Australia. It was conducted on Marqeta’s behalf by Propeller Research. The report details the effects that dynamic economic circumstances and emerging financial technology are having on consumer behaviour.
According to Marqeta, one key driver for many consumers surveyed was economic anxiety. This was due to rising costs and an uncertain job market. Amongst those surveyed, 61 per cent of 26-50 year olds reported that they’d changed their household budgeting due to the current economic circumstances. Meanwhile, roughly half of 18-25 year olds and 51-64 year olds said the same.
When asked to recall a specific example of the economy impacting their spending habits, over half (57 per cent) of respondents reported they have delayed at least one big purchase. Doing so because of rising interest rates or the general state of the economy.
The impact on housing
Housing provides one example of the impact of current economic circumstances. More than half (54 per cent) of renters surveyed reported that their rent increased within the past 12 months. For prospective buyers, rising interest rates make purchasing a home more expensive. Over half (51 per cent) of renters surveyed indicating that increased interest rates and the general state of the economy have led them to decide to delay purchasing a house.
The rapid pace of innovation in financial services was another source of influence on consumers this quarter. In response to emerging new tools and services, consumers are evaluating their options in relation to their needs and level of awareness of emerging financial services.
“Our report shows that in parallel to rising consumer uncertainties around escalating inflation, consumers are beginning to open themselves up to the unprecedented level of choice they now have in financial services,” said Rachel Huber, market intelligence lead at Marqeta. “With the rise of digital banking and embedded finance options, it’s essential brands understand how expectations and preferences are being shaped by innovation and macroeconomic conditions.”
Do solutions lie in embedded finance?
In addition to new offerings from their banks, consumers are also weighing a profusion of options from non-traditional providers via embedded financial services. Almost half (47 per cent) of respondents reported that they would consider financial services from non-financial institutions. For example, tech companies, social networks and retailers.
Considerable education gaps still remain for these new banking options, however. Amongst consumers who had not considered these emerging financial services, 29 per cent reported not being aware of these options. Thirty six per cent indicated they don’t see the value of these new services.
Banking preferences provide one example of the effects of this environment of heightened choice. When respondents were presented with a list of newer digital banking features, approximately half indicated they were already using the tools or were interested in adopting in future. Most popular were the well-established feature of overdraft protection and less common savings tools, like automated deposits into savings accounts and rounding up card purchases to the nearest dollar and depositing those funds into savings.
Consumer curiosity and exploration of cryptocurrency still remained high at the start of 2023. The consumers surveyed wanted more options for spending cryptocurrency. Nevertheless many remained uncertain of the space.
More than a quarter (27 per cent) of those surveyed wished it was easier to spend against their cryptocurrency balances. Roughly the same percentage (28 per cent) agree that the ability to make purchases with cryptocurrency is a significant benefit and makes shopping easier. Consumers want to use cryptocurrency. They do, however, still want the security of traditional accounts. According to the Marqeta report, a majority (59 per cent) of respondents agreed that they would not be comfortable holding a significant portion of their savings in cryptocurrency.