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TheMobileBuzz
Digital wallets face According to predictive analytics research conducted
by Gallup Inc., consumer response to digital wallets in
uphill battle the United States has been lukewarm. Of the more than
17,000 U.S. adults it surveyed in late 2014 and early 2015,
38 percent of respondents with digital wallets observed
no true benefits in using the technology over existing
methods.
Even after the launch of Apple Pay in October 2014,
Gallup found consumer enthusiasm for digital wallets
to be marginal. Only 13 percent of smartphone users it
surveyed had uploaded a digital wallet, and within that
group 76 percent said they had never used or seldom used
the wallet to make retail purchases.
Another stumbling block for mobile wallet providers is
that a majority of consumers expressed little interest in
espite speculation that digital wallets will one adopting digital wallets. According to Gallup, nine out of
day lead to cashless societies, adoption has yet 10 consumers without digital wallets lack plans to use one
to reach critical mass. While consumer willing- within the next 12 months.
D ness to forego physical wallets in favor of digi-
tal alternatives has been slow to pan out, influences like More than half of nonusers surveyed cited security
government support for cashless transactions and other (55 percent) as a primary reason for not intending to
factors are gaining ground in certain regions. However, use a digital wallet in the next year. Others indicated
until the market becomes more cohesive, physical wallets lack of knowledge about the technology (21 percent) as
will continue to be entrenched. an impediment. A smaller portion saw no real benefit
in using a digital wallet over existing credit cards (14
"Given the high fragmentation of the digital wallet percent) or perceived lack of retail acceptance as a reason
industry, interoperability among services providers and not to make the switch (5 percent).
platforms is pivotal for improving consumer choice,"
stated analysts at Global Industry Analysts Inc. in a Paving the road ahead
midyear assessment of global trends titled Mobile Wallet: According to Gallup, three digital wallet providers
A Global Strategic Business Report. dominate the market today. Google Wallet was favored by
35 percent of mobile wallet users surveyed, followed by
GIA found that while focus on consumer digital wallet Apple Pay at 24 percent and PayPal at 22 percent .
platforms is strong, smart money is betting corporate
users will fuel long-term growth. "Though the focus of To overcome consumer barriers to digital wallet adoption,
eWallet providers is largely on mass retail consumers, Gallup analysts recommend the following strategies:
digital corporate cards are expected to emerge and
gain momentum as the infrastructure expands, thereby • Gain trust on personal data security: Banks are
cannibalizing the market for traditional corporate credit well-positioned to quell security concerns and
and debit cards," GIA noted. increase branded wallet usage, but all parties
involved must be vigilant about keeping personal
GIA also identified financial inclusion as an avenue for data safe and secure.
mobile wallet adoption in countries where traditional • Educate on how to use digital wallets:
financial services are less widespread. "Besides in-store Suggestions included using instructional videos
payments and mCommerce, mobile ticketing and mobile or prominently displaying signage and collateral
money transfer are the other major application areas for materials at checkout lanes or bank branches
digital wallets," GIA wrote. "In addition, mobile wallets where mobile wallet offerings are available.
enable customers to purchase digital content, such as • Provide a clear value proposition: Banks can
mobile gaming apps."
serve as trusted financial advisers for some digital
U.S. market hits snag wallet users. And digital wallet providers can
extol the virtues of mobile wallet customization
Incremental increases in digital wallet usage observed for other users, based on built-in programming
in other world regions are not as prevalent stateside. capabilities.
U.S. consumers, while increasingly enamored with
smartphone and mobile devices, have been less receptive In the final analysis, GIA believes mobile POS systems
to kicking the physical wallet habit. and loyalty schemes at merchant POS terminals will be
what drive further adoption of digital wallets in the retail
sector.
33
Digital wallets face According to predictive analytics research conducted
by Gallup Inc., consumer response to digital wallets in
uphill battle the United States has been lukewarm. Of the more than
17,000 U.S. adults it surveyed in late 2014 and early 2015,
38 percent of respondents with digital wallets observed
no true benefits in using the technology over existing
methods.
Even after the launch of Apple Pay in October 2014,
Gallup found consumer enthusiasm for digital wallets
to be marginal. Only 13 percent of smartphone users it
surveyed had uploaded a digital wallet, and within that
group 76 percent said they had never used or seldom used
the wallet to make retail purchases.
Another stumbling block for mobile wallet providers is
that a majority of consumers expressed little interest in
espite speculation that digital wallets will one adopting digital wallets. According to Gallup, nine out of
day lead to cashless societies, adoption has yet 10 consumers without digital wallets lack plans to use one
to reach critical mass. While consumer willing- within the next 12 months.
D ness to forego physical wallets in favor of digi-
tal alternatives has been slow to pan out, influences like More than half of nonusers surveyed cited security
government support for cashless transactions and other (55 percent) as a primary reason for not intending to
factors are gaining ground in certain regions. However, use a digital wallet in the next year. Others indicated
until the market becomes more cohesive, physical wallets lack of knowledge about the technology (21 percent) as
will continue to be entrenched. an impediment. A smaller portion saw no real benefit
in using a digital wallet over existing credit cards (14
"Given the high fragmentation of the digital wallet percent) or perceived lack of retail acceptance as a reason
industry, interoperability among services providers and not to make the switch (5 percent).
platforms is pivotal for improving consumer choice,"
stated analysts at Global Industry Analysts Inc. in a Paving the road ahead
midyear assessment of global trends titled Mobile Wallet: According to Gallup, three digital wallet providers
A Global Strategic Business Report. dominate the market today. Google Wallet was favored by
35 percent of mobile wallet users surveyed, followed by
GIA found that while focus on consumer digital wallet Apple Pay at 24 percent and PayPal at 22 percent .
platforms is strong, smart money is betting corporate
users will fuel long-term growth. "Though the focus of To overcome consumer barriers to digital wallet adoption,
eWallet providers is largely on mass retail consumers, Gallup analysts recommend the following strategies:
digital corporate cards are expected to emerge and
gain momentum as the infrastructure expands, thereby • Gain trust on personal data security: Banks are
cannibalizing the market for traditional corporate credit well-positioned to quell security concerns and
and debit cards," GIA noted. increase branded wallet usage, but all parties
involved must be vigilant about keeping personal
GIA also identified financial inclusion as an avenue for data safe and secure.
mobile wallet adoption in countries where traditional • Educate on how to use digital wallets:
financial services are less widespread. "Besides in-store Suggestions included using instructional videos
payments and mCommerce, mobile ticketing and mobile or prominently displaying signage and collateral
money transfer are the other major application areas for materials at checkout lanes or bank branches
digital wallets," GIA wrote. "In addition, mobile wallets where mobile wallet offerings are available.
enable customers to purchase digital content, such as • Provide a clear value proposition: Banks can
mobile gaming apps."
serve as trusted financial advisers for some digital
U.S. market hits snag wallet users. And digital wallet providers can
extol the virtues of mobile wallet customization
Incremental increases in digital wallet usage observed for other users, based on built-in programming
in other world regions are not as prevalent stateside. capabilities.
U.S. consumers, while increasingly enamored with
smartphone and mobile devices, have been less receptive In the final analysis, GIA believes mobile POS systems
to kicking the physical wallet habit. and loyalty schemes at merchant POS terminals will be
what drive further adoption of digital wallets in the retail
sector.
33
