Hurting Consumers Spending Less for Holidays; Fiserv to Acquire Ondot
By Roy Urrico
Forty-eight percent of consumers expected to spend less money during the holiday shopping season compared with last year, according to survey released last month by San Jose, Calif.-based Ondot Systems. Inc. The research also discovered a quarter of consumers have fallen slightly or significantly behind on their credit card payments since the pandemic began in March.
The top three reasons consumers gave for spending less this holiday season:
· The uncertain economy.
· The desire to build their savings.
· Concerns about their employment and financial situation.
Ondot, which provides more than 4,500 banks and credit unions with a digital card management platform to drive cardholder engagement, aimed to measure the impact of the economic downturn, driven by the coronavirus pandemic, on holiday spending.
Overall, consumer spending continues to shift toward online and mobile channels, according to the survey, generating opportunities for card issuers and merchants to capture a greater spending share. The survey found 58% of respondents were planning to spend less in person, while 39% said they would increase online spending, and more than 27% said they would increase spending through their phone or a mobile app.
The survey noted that convenience was a critical driver in online spending, suggesting that online retailers should focus on fast checkout to capture consumer spending. Card issuers should focus on making cards easy to add to mobile wallets, such as Apple Pay, and help cardholders store their cards securely on merchant websites.
“Changes in spending this year present challenges, but also opportunities,” said Vaduvur Bharghavan, CEO of Ondot Systems. “Retailers and financial institutions that are prepared to meet these new needs will be best poised to capture holiday spending, both online and in-store.”
Conducted by SurveyMonkey on behalf of Ondot in October, 2020, the survey of 1,078 U.S. adults represented a variety of demographic factors including age, gender, household income and region of residence .
In a separate December announcement, Brookfield, Wis.-based Fiserv, Inc. announced that it signed a definitive agreement to acquire Ondot Systems, Inc. Fiserv said the transaction will further expand its digital capabilities, enhancing its suite of integrated solutions to enable clients to deliver frictionless, digital-first and personalized experiences to their consumers. Financial terms were not disclosed.
“The importance of digital has accelerated and consumers are increasingly turning to online and mobile banking, as well as contactless payments experiences,” said Frank Bisignano, president and CEO of Fiserv. “By combining Ondot and Fiserv capabilities at scale, we plan to provide our clients with a unified digital experience, spanning card-based payments, digital banking platforms, core banking, and merchant solutions, enabling them to deliver best-in-class solutions that continue to reduce friction for their customers.”
“The Fiserv aspiration to move money and information in a way that moves the world fully resonates with Ondot’s mission,” said Bharghavan. “Joining with Fiserv will provide Ondot the opportunity to innovate and impact the industry on a global scale. We look forward to expanding the scope of our offerings as we integrate with Fiserv’s vast array of capabilities to continue providing high-quality digital solutions to consumers, merchants, acquirers, networks and card issuers.”
The deal, subject to customary approvals and conditions, should close in the first quarter of 2021.