A new study suggests that 'millennials' and more affluent consumers see the most promise in digital currencies like bitcoin. The research further suggests that these groups could be the driving force behind mainstream adoption of the digital currency in the future.
Data from technology research firm Accenture collected insights into the digital payment preferences of more than 4,000 US citizens, and found that while only 8% of participants currently use digital currency, 18% foresee using the technology by the year 2020.
Individuals in the millennial generation – corresponding roughly to individuals between the ages of 18 and 34 – reported more enthusiasm for digital currency than the overall survey group. Thirteen percent of respondents in that category reported that they already use digital currencies on a daily basis, and 26% said that they would likely use them in the future.
Of consumers most likely to use digital currencies, both today and in the future, wealthy respondents showed the most enthusiasm: 19% of affluent participants use digital currencies today and 32% said that they expect to use them by 2020.
The Accenture report highlights that consumers see the cost, security and privacy benefits of digital currency, but stops short of guaranteeing the success of the technology, noting:
“Despite projected growth in use of digital currencies in the coming years, there is work to do to influence consumer awareness and adoption, particularly among people age 35 and over. Current users cite the protection of personal identity via anonymous transactions as the leading benefit of digital currencies.”
The results also suggest that a general apprehension shared among consumers regarding digital currency stems largely from a lack of information.
Benefits seen by consumers
According to Accenture, consumers are growing more aware of the advantages of using digital currency over both bank and non-bank payment options. The report indicates that digital currencies were cited by survey participants as the most promising payment technology on the market today, even though questions remain about the risks involved.
The report notes:
“This debate will likely continue as digital currencies mature, but it is not stopping consumers from using them. Among all payment instruments included in the Accenture survey, respondents expect the biggest boost in usage from today to 2020 to be in digital currencies.”
Thirty-six percent of respondents said that the pseudonymity and transaction protections offered by digital currencies were the most attractive characteristics of the technology. Twenty-one percent cited low-cost transactions as a major benefit, and 20% said that the lack of a central government or regulatory body made them interested in digital currencies.
Consumers also highlighted the ability to send transfers across borders cheaply and the fact that digital currency transactions are irreversible, with 15% and 7% of the group citing those advantages, respectively.
Concerns driven by information gap
Past studies have shown the general unease among consumer regarding digital currencies is driven in part by a lack of information. Accenture’s results echo those sentiments, with 38% of survey participants indicating that they have a poor understanding the technology and need more information.
Other participants focused on the functionality and legality of digital currencies as reasons for their reluctance to use them. A quarter of the survey group said that the inconvenience of conducting digital transactions is an issue, while 14% suggested that the ability to use the technology for fraudulent uses is problematic.
Accenture adds that, in order for digital currencies to see more widespread use over the next few years, the benefits need to be explained clearly and demonstrated to the broader public.
“For any digital currency to go mainstream, consumers need to be educated and become confident in it as a trusted and easy-to-use payment instrument,” the report concludes.
Millennial with phone image via Shutterstock