AMSTERDAM–(BUSINESS WIRE)–Marqeta (NASDAQ: MQ), the global modern card issuance platform, today released new data from a survey of European consumers on their attitudes and experiences with lending. The findings — part of Marqeta’s new report “Seeking out the alternatives: how consumers are engagement with the lending 3.0 landscape” — show that many consumers are frustrated with how outdated the lending industry is and say they’re a decade behind online Banking lags behind. Consumers also want more clarity, with 75% of respondents saying they “turn off” when potential lenders use industry jargon, and 80% believe lenders try to obfuscate the ultimate cost of a loan. This lack of clarity is often compounded by consumers’ experiences with lending, with 55% saying it takes too long for money to come in once a loan has been accepted.
Obviously, many consumers are hungry for change. The pandemic appears to have changed attitudes towards alternative forms of credit, with 59% of consumers surveyed believing it has opened their eyes to alternative financing. Younger generations are particularly interested in exploring alternative credit, with 71% of respondents aged 18-34 saying they have had their eyes opened. The survey of 2,000 European consumers, conducted by Propeller Insights on behalf of Marqeta, found that only 55% of respondents know what their options are when a loan is declined, although more consumers are aware of alternative financing. That’s a high number, especially as the cost-of-living crisis is causing many consumers to rethink their finances. When asked about different forms of financing, many consumers were not aware of any alternatives:
BNPL is the best understood alternative financing option, with 77.6% of respondents saying they have a good understanding of such services and 32% having used them
47% of consumers surveyed do not know what peer-to-peer lending is and only 15% have actually used it
Almost half (45%) of the consumers surveyed do not know what payroll is
Anna Porra, European Strategy Director at Marqeta, comments: “As the cost of living crisis continues and consumer confidence hits an all-time low according to certain metrics, many will look to credit as a help. However, our survey shows that more education about alternative options is needed. If consumers don’t understand the options available to them, they may struggle to access much-needed finance or be forced to look for more expensive options. With more than half of respondents saying it takes too long for money to come in after accepting a loan, it’s clear that more needs to be done to support those seeking finance, especially the younger generation.”
The survey showed that consumers are increasingly aware of what they want from the lending industry. 69% of respondents are interested in real-time data alerts on how they are spending their loan, and 61% want real-time credit advice from providers. Consumers would also like to have a more personal relationship with lenders, with 67% of respondents wanting a relationship with their lender rather than just filling out an online form. The majority (53%) of consumers surveyed would go one step further and are interested in collaborative credit offerings. 56% would also prefer to repay a loan to a loan syndicate than to a traditional lender. The majority (75%) are also interested in responsible lending options that benefit their community, and in fact 54% would go as far as paying a monthly fee for more ethical lending options. The appetite to be part of a lender community is also increasing among younger generations, rising to 67% among respondents aged 18-34.
Looking ahead to future technologies, the study showed that consumers have a real appetite to explore new technologies such as cryptocurrency, NFTs and borrowing games:
49% of consumers surveyed would take out a cryptocurrency loan or would be open to it
69% of NFT owners surveyed would be willing to use their wealth as collateral for a better loan
40% of respondents play games where tradable gaming assets can be purchased. And of those, 62% would be open to using those assets as collateral for a better loan
Porra continues: “For traditional lenders, the writing is on the wall. Consumers increasingly want and expect the level of modernization and personalization they have become accustomed to in other areas of their lives. “Buy now, pay later” services like Klarna have opened up modern forms of lending to consumers, and now is the time for the industry to show consumers more of what’s possible. Our survey showed that when lenders can educate customers and provide clarity about alternative financing, there is a real appetite for innovation in lending. The younger generation in particular is showing a real interest in exploring new technologies and offering lenders an opportunity to lead the pack.”
The full report can be found here: https://www.marqeta.com/uk/lending-3-0-research
About the research
The results come from 2,000 survey responses from European consumers – 1,000 in the UK, 200 in France, Germany, Spain, Italy and the Nordic countries. The research was conducted by Propeller Insights and commissioned by Marqeta.
Marqeta’s modern card issuance platform enables its customers to create customized and innovative payment cards. Marqeta’s platform, based on open APIs, empowers its customers to build more configurable and flexible payment experiences, accelerate product development and democratize access to card issuance technology. Its modern architecture provides instant access to a highly scalable, cloud-based payments 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 has operations in 39 countries worldwide. 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 with respect to on consumer borrowing and lending preferences; consumer attitudes towards alternative credit and digital payment products and services; and the future of alternative lending and borrowing. Actual results could differ materially from expectations contained in these statements due to risks and uncertainties, including but not limited to the following: the uncertainty and unpredictability of consumer preferences regarding alternative lending and digital payment and banking products and services; the impact and uncertainties related to the global COVID-19 pandemic on the US and global economy and demand for alternative credit and digital payment and banking products and services; the uncertainties and direct and indirect implications of Russia’s significant military action against Ukraine, including threats of attacks on US financial institutions in retaliation against financial institutions for sanctions imposed on Russia; the risk that alternative lending and digital payment and banking products and services may fail to continue to attract and expand their customer base; the risk that consumers will not take advantage of alternative lending and digital payment and banking products and services; the risk that alternative credit and digital payment and banking products and services may not work as intended; the risk that alternative credit and digital payment and banking products and services may not achieve expected market acceptance; and the risk that competition could reduce expected demand for alternative lending and 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 “Risk Factors” included in Marqeta’s quarterly report on Form 10-Q dated March 31, 2022 For the quarter ended, such risk factors may be updated from time to time in Marqeta’s periodic filings with the SEC, which are available at www.sec.gov and on 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 of this release. Marqeta disclaims any obligation to update any forward-looking statement, except as required by law.