With the buying power of the U.S. Hispanic market now eclipsing $1.2 trillion annually, marketers are more focused than ever on attracting this lucrative consumer segment to their brands. However, as the number of payment options available increases, the connection between purchase and payment has far-reaching implications—from how marketing should be planned to how products are distributed and even to how sales are forecasted and measured.
When it comes to using financial instruments, Hispanics’ monetary habits differ from those of the total U.S. population. According to Nielsen’s Share of Wallet Study, 44% of Hispanics use debit cards most often, while 34% prefer cash or check. Only 19% use credit cards most often, compared with 35% nationally. Hispanics also trail in using new technology for payments—5% of Hispanics shop, bank and pay using mobile devices, and 20% of Hispanics are mobile payers/mobile payment users. Beyond payments, only 15% of Hispanics are mobile bankers, compared with 65% non-Hispanic whites, 11% African-Americans and 7% Asian-Americans, according to Nielsen’s Q2 Mobile Wallet Report.
According to the Nielsen Share of Wallet Report, two thirds (66%) of total persons 18+ have an individually owned credit card. Among Asians that increases to 80%, while penetration among Hispanics is 57% and 62% for African Americans.
However, Hispanics consumers comprise many different groups—from their language to their origins. These subgroups have different purchasing habits and preferred methods of payment that can vary significantly from other ethnic groups. When breaking down Hispanics by the primary language spoken in the home, the percentage of English-only Hispanics who have an individual credit card is equal to the national average, and ownership among all Hispanics who speak at least some English is over 60%.
Understanding Hispanic’s unique financial habits is crucial to engaging this increasingly powerful demographic. “The Hispanic consumer provides a plethora of engagement opportunities,” said Monica Gil, SVP, Multicultural Affairs at Nielsen. “Marketers and brands may have an advantage in reaching this population group by providing products and services that meet the needs of this demographic.”
Nielsen’s Share of Wallet Study was administered as an online English-language survey to a general population survey between September and November 2014. The general population sample included 5,028 respondents aged 18 years or older, weighted by gender, age and race. Oversamples were conducted of 1,442 Asian-American, 1,499 African-American, and 1,568 Hispanic respondents aged 18 years or older. The oversamples included CATI methodology for Hispanics, and offered Hispanic respondents the opportunity to take the survey in English or Spanish.