Check out the inaugural Consumer Pulse Report by Marqeta, which delves into how economic conditions and financial technology are influencing consumer behavior.

The inaugural Consumer Pulse Report has been published by Marqeta, a global platform for modern card issuance. The report is based on 4,000 February 2023 US, UK, and Australian consumer surveys. Propeller Research conducted it on Marqeta’s behalf. The paper goes into detail about how changing economic conditions and new financial technology are impacting consumer behavior.

Marqeta claims that economic fear was a major motivator for many of the consumers she studied. This was brought on by rising prices and a shaky job market. 61% of respondents ages 26 to 50 said they had adjusted their household budgeting as a result of the present economic climate. While about half of respondents between the ages of 18 and 24 and 51 to 64 agreed.

About half (57%) of respondents said they had postponed at least one major purchase when asked to give an example of how the economy had affected their spending patterns. Doing so as a result of rising interest rates or the economy as a whole.

The effect on housing

One area where the effects of the current economic situation are evident is in housing. 54% of tenants asked said their rent has gone up in the last 12 months. Rising interest rates increase the cost of buying a property for potential purchasers. 51% of renters said rising interest rates and the economy had prevented them from buying a home.

Consumers were also affected this quarter by the quick pace of innovation in the financial services industry. Consumers are assessing their alternatives in light of their demands and degree of knowledge regarding new financial services in reaction to the emergence of new tools and services.

“Our analysis reveals that concurrently with rising consumer anxieties about escalating inflation, consumers are beginning to open themselves up to the unprecedented level of choice they now have in financial services,” says Marqeta market intelligence lead Rachel Huber. “With digital banking and embedded finance options, businesses must understand how innovation and macroeconomic factors are influencing consumer expectations and preferences.”

Do embedded finance solutions exist?

Consumers are considering embedded financial services from non-traditional providers and new bank offerings. About 50% of respondents (47%) said they would explore financial services from non-financial entities. For instance, internet firms, social media platforms, and merchants.

Nonetheless, there are still large educational gaps for these new banking possibilities. 29 percent of consumers said they were unaware of these new financial services. 36 percent of respondents said they don’t see the value in these new offerings.

One illustration of the effects of this environment of increased choice is banking preferences. Respondents said half used or would use current digital banking features when given a list. The most popular features were overdraft protection and unusual savings methods like rounding up credit card purchases to the nearest dollar and transferring those funds into savings.

Crypto curiousness

Public interest in and exploration of cryptocurrencies was still high at the beginning of 2023. More payment methods for cryptocurrency were desired by the studied consumers. Yet, many people were still unsure about the area.

More than a quarter (27%) of those polled said they wished it were simpler to withdraw money from their cryptocurrency balances. The similar amount of people (28%) concur that using cryptocurrencies to make purchases has substantial advantages and simplifies the purchasing process. Consumers are interested in utilizing cryptocurrencies. Nonetheless, many continue to desire the security of conventional accounts. The majority of respondents (59%) in the Marqeta research agreed that they would not feel secure storing a sizeable chunk of their wealth in cryptocurrencies.

Changing consumer trends
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