Marqeta's new report surveyed 4,000 consumers in the US, UK and Australia, looking at the factors guiding their financial decisions in 2023, with several key takeaways:
- Over half of respondents (57%) agreed that recent headlines about the economy had changed their household budget.
- 51% of consumers currently renting reported that interest rate increases had caused them to delay a house purchase, with 54% of renters citing rent increases in the last 6 months.
- In this economic environment, embedded finance options are making a clear case to consumers, with just under half (47%) of respondents reporting that they would consider financial services offered by non-traditional providers, including tech companies, social networks and retailers.
Marqeta (NASDAQ: MQ), the global modern card issuing platform, released its first Consumer Pulse Report today. Based on the findings of a February 2023 survey of 4,000 consumers across the US, UK and Australia, conducted on its behalf by Propeller Research, the report details the effects that dynamic economic circumstances and emerging financial technology are having on consumer behavior.
One key driver for many consumers surveyed: Economic anxiety due to rising costs and an uncertain job market. Amongst those surveyed, 61% of 26-50 year olds reported that they'd changed their household budgeting due to the current economic circumstances, while 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%) of respondents reported they have delayed at least one big purchase due to rising interest rates or the general state of the economy.
Housing provides one example of the impact of current economic circumstances. More than half (54%) 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, with over half (51%) 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 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."
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%) of respondents reported that they would consider financial services from non-financial institutions like 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% reported not being aware of these options and 36% 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 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: with consumers surveyed wanting more options for spending cryptocurrency, but still uncertain of the space. More than a quarter (27%) of those surveyed wished it was easier to spend against their cryptocurrency balances, with roughly the same percentage (28%) agreeing that the ability to make purchases with cryptocurrency is a significant benefit and makes shopping easier. Consumers want to use cryptocurrency, but still want the security of traditional accounts a majority (59%) of respondents agreed that they would not be comfortable holding a significant portion of their savings in cryptocurrency.
To access the full report and learn more about the latest consumer trends and insights, visit Marqeta's website.
Marqeta's Q1 2023 Consumer Pulse report is based on a survey of 4,000 respondents between the ages of 18-65 (approximately 2,000 in the US, 1,000 in Australia and 1,000 in the UK). It was completed between February 6 and February 15, 2023 by Propeller Research on behalf of Marqeta, Inc.
Marqeta's modern card issuing platform empowers its customers to create customized and innovative payment cards. Marqeta's platform, powered by open APIs, gives its customers the ability to build more configurable and flexible payment experiences, accelerating product development and democratizing access to card issuing technology. Its modern architecture provides instant access to highly scalable, cloud-based payment infrastructure that enables customers to launch and manage their own card programs, issue cards and authorize and settle transactions. Marqeta is headquartered in Oakland, California and is certified to operate in 40 countries globally. For more information, visit www.marqeta.com, Twitter and LinkedIn.
This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements expressed or implied in this press release include, but are not limited to, quotations and statements relating to changing consumer preferences; increasing consumer adoption of certain digital payment methods, products, and solutions; which payment, banking, and financial services products and solutions may succeed; technological and market trends; Marqeta's business; Marqeta's products and services; and statements made by Marqeta's senior leadership. Actual results may differ materially from the expectations contained in these statements due to risks and uncertainties, including, but not limited to, the following: any factors creating issues with changes in domestic business, market, financial, political and legal conditions; the effect of and uncertainties related to the global COVID-19 pandemic on U.S. and global economies and demand for Marqeta's services and products; the uncertainties and direct and indirect effects of the significant military action against Ukraine launched by Russia, including threats of attacks against U.S. financial institutions as retaliation against financial institutions for sanctions imposed against Russia; the risk that Marqeta is unable to further attract and grow its customer base; the risk that consumers will not perceive the benefits of Marqeta's products and services, including digital payment and banking products and services; the risk that Marqeta's products and services do not operate as intended, including digital payment and banking products and services; the risk that Marqeta's products and solutions will not achieve the expected market acceptance, including digital payment and banking products and services; and the risk that competition could reduce expected demand for Marqeta's products and services, including digital payment and banking products and services. Detailed information about these risks and other factors that could potentially affect Marqeta's business, financial condition and results of operations are included in the "Risk Factors" disclosed in Marqeta's Annual Report on Form 10-K for the year ended December 31, 2022, as such risk factors may be updated from time to time in Marqeta's periodic filings with the SEC, available at www.sec.gov and Marqeta's website at http://investors.marqeta.com. The forward-looking statements in this press release are based on information available to Marqeta as of the date hereof. Marqeta disclaims any obligation to update any forward-looking statements, except as required by law
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