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People are warming up to mobile wallets more every year. In its most recent Banking and Payments Intelligence Report, JD Power found that between the first quarter of 2021 and the third quarter of 2022, the percentage of American retail bank customers that said they used a mobile wallet at some point in the previous three months jumped to 49% from 38%.
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However, the same report stated that despite society becoming cashless and modern life dictating that everyone carries their devices at all times, people still prefer the convenience of cash, credit and debit cards. The percentage of people polled who claimed not to use mobile wallets because cards are more convenient increased from 47% to 49% in 2022.
The other reasons that consumers said they didn’t use a mobile wallet at some point within the last three months in Q1 of 2021 and Q3 of 2022 were that they had heard of mobile wallets but had never set one up (24% from 37% ), were concerned about safety (21% from 25%) and they were difficult to use (5% from 6%).
“While other barriers to the widespread adoption of mobile wallets continue to erode (eg, security concerns), customers are increasingly satisfied with the simplicity of paying with plastic, and it should inform banks and card issuers how they serve their customers in the year ahead ,” the report stated.
Generally speaking, a mobile wallet is very much like a physical wallet. The difference is that one sits on your mobile device while the other gets put in your purse or pocket. Despite the reluctance to adopt widespread use of mobile wallets, they are an attractive option with plenty of advantages.
1. Contactless
Most payments can be done using tap-to-pay with contactless credit cards, but in a world increasingly moving towards contactless interaction, mobile wallets enable consumers to touch nothing more than their phone when making a transaction.
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2. Cut Clutter
As Nasdaq noted, “most of us would feel just fine walking around without a wallet as long as we could still buy things.” Along those same lines, digital wallets can manage all your debit and credit cards, memberships, boarding passes and more without adding anything more to carry.
3. Security
Additionally, mobile wallets are considered more secure than physical cards. You need a passcode, face recognition or a print scan before making a payment, and payments themselves don’t expose sensitive account information because they use encrypted tokenization.
4. Convenience
Those who maintain that using cards is more convenient might be missing out on the accessibility that mobile wallets afford. Not only can you dispense with carrying around a bulky wallet with multiple cards, but you only need to wave your phone over a near-field communication (NFC) reader for a second to make a payment.
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5. Save Time
Mobile wallets complete transactions faster. A quick contactless payment eclipses a debit or cash payment every time. An American Express study found contactless transactions to be 63% faster than cash, and 53% faster than those using a traditional credit card.
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