COVID-19 Totally Changed How We Spend Our Money
For many people, the pandemic changed how we shop, where we work and what we’re spending money on. But it’s also changing the way we spend our money.
The Chase 2020 Digital Banking Attitudes Study emphasized the move toward digital banking, peer-to-peer payments and online fraud alerts. The study also showed a tremendous — and relatively sudden — shift in our interactions with paper money.
“Consumers banked digitally more frequently during the pandemic than ever before, and that trend will continue (through) 2021 and beyond,” said Allison Beer, head of digital at Chase. “Consumers across all age groups trust that they can bank safely from anywhere, making it easier and safer for them to manage their money.”
To track digital banking trends, Chase polled 1,500 people ages 18 to 65, with half being Chase customers and the other half non-Chase customers.
The survey, with key findings conveyed in an infographic released by Chase today, revealed that 80% of the bank’s customers prefer to manage their finances digitally rather than in person, and half of all customers call the bank’s mobile app a “must-have.”
Customers use the app most for fraud alerts and electronic bill pay but also rely on it to check account balances and deposit checks. People do still use checks — and cash, for that matter — although more consumers have embraced contactless payment methods since the pandemic.
“Interestingly, our research found that 13% of surveyed customers cited avoidance of paper money and physical cards as one of their top three reasons for using digital payment tools during the pandemic,” Beer said.
Thirty percent of those surveyed said they signed up for a peer-to-peer payment platform within the last six months, which coincides with the heart of the pandemic. Forty-five percent of early adopters say they’re using the apps more frequently now.
Not as popular in the wake of COVID-19? Mobile wallets. With fewer people shopping in stores, there are fewer overall point-of-sale transactions.
“In the context of the pandemic,” Beer told GoBankingRates, “it was interesting to see how consumers have shifted to more contactless forms of payments, like P2P platforms which include QuickPay with Zelle, among others.”
More people — over 50% — are also applying digitally for mortgages this year, nearly double the number from Q2 2019, a Chase press release stated.
The survey revealed a few other surprises as well, including a shift in saving habits. In December 2019, 69% of Americans had less than $1,000 in their savings account, GoBankingRates’ sixth annual savings survey showed.
This year’s Chase study revealed that 40% of its customers say they plan to contribute more to their savings account in 2021 than they did in 2020. “The majority shared their plans to contribute at least once a month,” Beer said.
Currently, 1 in 3 Chase customers deposit money in their savings account more than once a month, and 30% have a paycheck deposit or autosave set up for direct-to-account savings.
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