A large and growing number of consumers have embraced digital gift cards, mobile wallets, and gift card exchanges, according to a new study.
"How America Pays in 2016
" by Blackhawk Network
found that consumers use of cash is declining, while at the same time more people are turning to digital payment technologies like "mobile wallets" which users to keep all their credit and gift cards in an encrypted, secure app on a smartphone.
Consumers' use of gift cards continues to grow, with 84 percent saying they plan to buy the same amount or more gift cards in 2016 than they did the year before.
On the digital side, fully 69 percent of consumers are now familiar with digital gift cards and codes delivered by email, social media, or text message, the study found. More than half have purchased them or plan to this year.
Mobile wallet adoption nearly doubled from last year, growing from 8 percent in 2015 -- the first year prepaid gift card and payments firm Blackhawk Network conducted this study -- to 17 percent in 2016. While still a fairly small percentage, one third of mobile phone owners have a mobile wallet on their phone, and Millennials are more likely to have and use them than other demographics, the report found.
Gift card exchanges are growing rapidly, with a great deal of that growth attributable to consumer demand. About one-fifth (19 percent) of the 1,037 U.S. consumers age 18 and up polled in March have used gift card exchanges, which were practically unknown just a few years ago. Beyond that, the study found that 57 percent of respondents have unused gift cards at the time of the study; more than half of the respondents would be interested in using and exchange online or at an in-store gift card kiosk.
Gift cards were the number one method (45 percent) that consumer loyalty program members said they prefer to receive their awards.