Despite speculation that digital wallets will one day lead to cashless societies, adoption has yet to reach critical mass. While consumer willingness to forego physical wallets in favor of digital alternatives has been slow to pan out, influences like government support for cashless transactions and other factors are gaining ground in certain regions. However, until the market becomes more cohesive, physical wallets will continue to be entrenched.
"Given the high fragmentation of the digital wallet industry, interoperability among services providers and platforms is pivotal for improving consumer choice," stated analysts at Global Industry Analysts Inc. in a midyear assessment of global trends titled Mobile Wallet: A Global Strategic Business Report.
GIA found that while focus on consumer digital wallet platforms is strong, smart money is betting corporate users will fuel long-term growth. "Though the focus of eWallet providers is largely on mass retail consumers, digital corporate cards are expected to emerge and gain momentum as the infrastructure expands, thereby cannibalizing the market for traditional corporate credit and debit cards," GIA noted.
GIA also identified financial inclusion as an avenue for mobile wallet adoption in countries where traditional financial services are less widespread. "Besides in-store payments and mCommerce, mobile ticketing and mobile money transfer are the other major application areas for digital wallets," GIA wrote. "In addition, mobile wallets enable customers to purchase digital content, such as mobile gaming apps."
Incremental increases in digital wallet usage observed in other world regions are not as prevalent stateside. U.S. consumers, while increasingly enamored with smartphone and mobile devices, have been less receptive to kicking the physical wallet habit.
According to predictive analytics research conducted by Gallup Inc., consumer response to digital wallets in 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 adopting digital wallets. According to Gallup, nine out of 10 consumers without digital wallets lack plans to use one within the next 12 months.
More than half of nonusers surveyed cited security (55 percent) as a primary reason for not intending to use a digital wallet in the next year. Others indicated lack of knowledge about the technology (21 percent) as an impediment. A smaller portion saw no real benefit in using a digital wallet over existing credit cards (14 percent) or perceived lack of retail acceptance as a reason not to make the switch (5 percent).
According to Gallup, three digital wallet providers dominate the market today. Google Wallet was favored by 35 percent of mobile wallet users surveyed, followed by Apple Pay at 24 percent and PayPal at 22 percent .
To overcome consumer barriers to digital wallet adoption, Gallup analysts recommend the following strategies:
In the final analysis, GIA believes mobile POS systems and loyalty schemes at merchant POS terminals will be what drive further adoption of digital wallets in the retail sector. 
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