August 22, 2022 | 5 min read
What consumers think about lending and digital currency
In recent years, Oscar Wilde’s famous quote about the benefits of being the subject of gossip seems to have become a bit of a cliche. Nevertheless, it could easily find relevance among the digital currency scene right now.
In 2021, fintech aficionados watched the rise and rise of crypto with a growing sense of awe and excitement. After years as an enigma, blockchain money seemed like it was finally going mainstream.
Then 2022 happened.
And it’s fair to say it’s shaping up to be quite a different year for crypto businesses. Media stories abound about layoffs and devaluations. To many in the outside world, digital coins might again seem like an uncertain bet.
As far as we’re concerned, though, there’s still plenty to be optimistic about. Innovators shouldn’t allow recent turbulence to deter them from their mission to make cryptocurrencies more accessible to people wherever they are in the world.
Indeed, a hot-off-the-press Marqeta study has uncovered a promising level of consumer appetite for wedding cryptocurrencies to the credit and finance markets. Our latest research paper, Seeking out the alternatives: how consumers are engaging with the Lending 3.0 landscape, took in the views of 2,000 UK and European adults aged from 18 to 70+. We wanted to better understand attitudes towards new and existing propositions while gaining insights into where the next opportunities lie.
On the topic of digital currencies, our research found that more than a third (37.4%) of people we surveyed said they would be really interested or would consider using crypto assets as collateral for secured loans. More than one in 10 (11.7%) folks surveyed had already used crypto lending services.
Breaking this down by age, just over half of 18-24-year-olds surveyed at 50.7% would be really interested or would consider using crypto assets as loan collateral, dropping to 47.9% for 25-34-year-old respondents, 46.9% for 35-44-year-old respondents, 37.8% for 45-54-year-old respondents, 21% for 55-64-year-old respondents and just 10.9% for those respondents aged over 65.
Interestingly, nearly two thirds (57%) of respondents didn’t think having a Visa or Mastercard logo on a crypto card product would make a difference on their thoughts about using crypto assets as collateral for secured loans.
After talking about digital currencies, we moved on to non-fungible tokens (NFTs) and the response was fascinating and surprising in equal measure.
As much as 15% of our survey audience claimed to own NFTs and a further 23% of respondents were investigating investing.
And it seems there is a big opportunity for digital assets to play a role in lending products, with 18% of respondents saying they’d be interested in using an NFT to secure a loan or a better rate while a further 51% of respondents would consider it.
This is perhaps testament to the level of hype around NFTs on social media and traditional media over the past 12 months.
There was a similar level of enthusiasm for bringing tradeable gaming assets, as offered by the likes of Fortnite, World of Warcraft and League of Legends, into the lending space. A third of our survey respondents either owned tradeable gaming assets or played games where they could be purchased. Of these respondents, 15% said they would be really interested in having an option of using their gaming assets as collateral for a better rate on a secured loan, while 47% would consider it.
But perhaps the key point of interest with this segment is the age split. The largest tradeable asset owning demographic was by far and away 18-24-year-old respondents at 41.1%. Those respondents aged over 65 accounted for less than 2% of the group.
So there we have it.
Three areas of digital value that represent an opportunity for lenders to do at least one of three things:
Leverage new types of loan collateral, deliver greater interest rate flexibility and find relevance among new audiences.
These tasks are made infinitely easier thanks to modern payment card technology that is helping to bridge the gap between digital and fiat currencies, allowing innovators to deliver greater levels of personalisation and in real time.
Those of us on the frontline of innovation can feel comforted by Marqeta’s research findings and perhaps Wilde’s wise words: “There is only one thing in life worse than being talked about, and that is not being talked about.”
