Consumers recognize mobile wallets, but security concerns prevent widespread use

July 23, 2014

The majority of U.S. consumers recognize digital wallets as an alternative to cash-based transactions, but use remains at less than one-third thanks to security concerns, according to a new study from Thrive Analytics. Thrive is a local search and digital marketing research and customer engagement strategy consulting firm.

The 2014 Digital Wallet Usage Study revealed that despite nearly 80 percent of consumers being aware of digital wallets—including major players like PayPal, Google Wallet, Apple Passbook—security concerns remain the main barrier to adoption, followed by lack of usability versus credit cards/cash (37 percent) and not being top of mind as a form of payment at the time of purchase (32 percent). Results of the 2014 Digital Wallet Usage Study were compiled by Thrive Analytics from an online survey of more than 2,000 U.S. smartphone, tablet and desktop users in June 2014.

"An overwhelming majority of consumers acknowledge the presence of digital wallets, however a minority have actually used them despite fewer shoppers carrying cash today," Jason Peaslee, managing partner of Thrive Analytics, said in a statement. "This paradox presents a vast opportunity for both digital wallet providers and retailers to educate consumers on the unique benefits of the digital wallet shopping experience. The key to increasing consumer and overall market adoption is understanding and operationalizing critical demographic usage profiles and purchase patterns."

Demographics Matter

Key findings from the survey indicate consumers are carrying less cash today, especially on-the-go females, with 50 percent of all consumers carrying less than $20 on a regular basis, according to the press release. Of the survey respondents who carry no cash at all, three out of four are under the age of 40. Also, nearly 60 percent of all digital wallet users are male despite carrying more cash than females. Females (18-29) tend to use merchant digital wallet apps such as Target, Macy’s and Home Depot more often than males to look for discounts/coupons (72 percent) and price shop (56 percent). When males use merchant apps, they tend to browse and engage in service related activities like paying bills and looking up retailers’ product and contact information, according to the announcement. 

Device Usage and Vendor Platforms Matter

Other study findings showed that the majority of digital wallet transactions are conducted on mobile devices (60 percent) and 3 out of 4 transactions under $10 are done weekly via a mobile phone, according to the press release. Typical products purchased with digital wallets include coffee/drinks, retail items, games and books, as well as groceries.

The top digital wallets used are PayPal (79 percent) Google Wallet (40 percent) and Apple Passbook (17 percent) with Google Wallet leading the large transaction pack with purchases of $30 or more (35 percent). Further, 70 percent of digital wallet users take advantage of one or more digital wallets at least monthly, and daily digital wallet users tend to use more types of digital wallets (3) than infrequent users (1).

Added Peaslee, "Retailers need to expand payment acceptance options via leading digital wallets to capture all possible sales and show customers their commitment in investing in a variety of secure mobile payment types."


Topics: Contactless / NFC, Security


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