The Green Sheet Online Edition
March 3, 2025 • 25:03:02
No cash, no card, no problem: The mobile wallet wave in convenience retail
Cash is getting benched, and plastic is losing its shine. Mobile wallets are becoming the go-to payment method, especially in convenience stores where every second counts. Shoppers want speed, retailers want efficiency and digital payments deliver on both fronts. With a quick tap, checkout lines move faster, loyalty perks land instantly and the need for physical wallets keeps shrinking.
Factors driving mobile wallet adoption
- Convenience and speed: Consumers appreciate the ability to complete transactions swiftly without handling cash or cards. A recent SmartDev report indicated that 80.6 percent of digital wallet users in the United States prefer them due to their speed, and 76.9 percent due to their overall convenience (see bit.ly/3XPurg2). This preference aligns well with the fast-paced environment of convenience stores.
- Health and safety considerations: The COVID-19 pandemic heightened awareness of contactless payment methods. Mobile wallets enable tap-to-pay transactions, reducing physical contact—a feature that has become increasingly important to health-conscious shoppers. This shift has particularly benefited convenience stores, which aim to provide safer shopping experiences.
- Integration with loyalty programs: Many mobile wallet platforms seamlessly integrate retailer loyalty programs, offering personalized discounts and rewards. This integration enhances the customer experience and encourages repeat business, allowing stores to engage directly with consumers through digital offers. For instance, Starbucks effectively utilized its mobile app to combine payment and loyalty features, resulting in a significant portion of its transactions being conducted via mobile.
Benefits for consumers and retailers
Mobile wallets streamline the checkout process for consumers and eliminate the need to manage physical wallets. Younger demographics, particularly Millennials and Gen Z, are quick to adopt these technologies, favoring apps that combine payment functions with rewards and personalized offers. Nine percent of Americans aged 18 to 25 and 73.7 percent of those aged 26 to 40 make payments using digital wallets, compared to just 30 percent of those over 57 (see bit.ly/43KNYSv).
Reduced cash handling can lower transaction costs for retailers. Also, by shifting away from traditional card networks, some convenience stores can reduce interchange fees and improve operational efficiency. Additionally, the data collected from mobile wallet transactions can provide insights into consumer behavior, allowing for more targeted marketing strategies. Integrating mobile wallets with loyalty programs enables retailers to offer personalized promotions, increasing customer engagement and loyalty.
Challenges and future outlook
Despite the positive momentum, there are challenges to overcome. Not all consumers have fully transitioned to digital payments; many, particularly older or more vulnerable populations, still rely on cash. Retailers must balance the efficiency gains of mobile wallets with the need to remain inclusive.
Ensuring robust security and privacy for digital transactions remains critical, as consumers are wary of data breaches and unauthorized access. A PYMNTS study found that 85 percent more consumers use mobile wallets to pay bills than to pay merchants through QR codes and NFC tap to pay, indicating a slower adoption rate for in-store payments (see bit.ly/4bSIdUR).
Advancements in technology, such as improved near field communication systems and enhanced app integrations, are expected to drive mobile wallet adoption in convenience stores further.
As these systems become more reliable and ubiquitous, convenience stores will likely continue evolving into digital hubs, offering speed, convenience and personalized services. Moreover, the global digital payments market is expected to reach $14.79 trillion by 2027, with a compound annual growth rate of 11.79 percent from 2023 to 2027, indicating significant growth potential.
The rise of mobile wallets in convenience stores is reshaping retail convenience, offering a more efficient, secure and customer-centric payment experience. This trend is fueled by consumer demand for convenience, the need for contactless transactions in a post-pandemic world, and retailers’ drive to lower costs and boost customer loyalty. As technology advances and consumer preferences evolve, mobile wallets are poised to become integral to the convenience store experience. 
Elie Y. Katz is founder, president and CEO at National Retail Solutions (NRS), https://nrsplus.com. Contact him by phone at 201-715-5179 or by email at ekatz@nrsplus.com. Five essential skills for success in the payments industry
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