Payment innovation may be right around the corner, but it could be a little tricky getting there according to a new study on digital wallets. Digital wallets refer to new payment technology that allows consumers to pay with their mobile device, usually a smart phone. As check processing providers we hear a lot about digital wallets and cell phone apps that let you pay without plastic, cash or paper. Is this the future of payments?
The study by comScore, Inc. called Digital Wallet Road Map 2013 suggests the road to digital wallet adoption could be a bumpy ride.
Everyone seems to be talking about digital wallets, but according to the new study, we need some help when it comes to putting the digital wallet into play. With several companies providing digital wallet platforms, some of which are big names in payments, few major retailers are ready to accept them. Consumers, even those who demand the latest and greatest, have yet to see this as more than something new to do with their smart phone.
The study conducted in November 2012 consisted of two surveys. One asked over 2,800 consumers to review a digital wallet provider's website and then respond to questions asking about understanding and possible adoption of the wallet. Another group, of 2,300 consumers, was provided with basic information and asked about their intent and perceptions.
The results highlight consumer concerns while also shedding light on potential opportunity. Here are some of the findings:
- There is a fragmented landscape of digital providers, in part because of low consumer adoption of any one technology
- Awareness of digital wallets is much higher than adoption with PayPal leading the way in awareness (72 percent) and adoption (48 percent)
- Only 51 percent of respondents were aware of any providers other than PayPal
- Over 40 percent of consumers were aware of Google Wallet, yet only 8 percent used it
- Security is a concern and 47 percent said security, theft or loss of the phone was the main reason they were hesitant to use a digital wallet
- Nine percent said the wallet wasn't useful enough to use
- Not happening... 23 percent said there were not likely to use a digital wallet
According to Andrea Jacobs from comScore, low awareness, understanding of benefits and availability among retailers are among the key barriers to adoption of digital wallets.
Here's what we know: as consumers we want speed, security, tracking, mobility and ease-of-use when it comes to payments. Same thing for business owners along with cost-effective equipment, low fees, and a standardized system that accommodates a majority of users. Even as new payment providers and technology have entered the market over the last year, we have yet to really embrace a single solution.
As consumers learn more about the benefits of digital payments and as retailers invest in the necessary steps to process these payments, adoption will happen and may happen extremely quickly. We're getting closer, but we're not there yet.
Do you use a digital wallet? Tell us which one and what you like about it.