With nearly every adult consumer carrying some type of smartphone, digital wallets are an increasingly viable alternative payment method at the point of sale (POS) and online. Payments are not all they can do, either: They have also become a convenient way to store loyalty and rewards cards, transportation and event tickets, and even driver’s licenses in a handful of states across the United States.
Security features may help explain why 85% more consumers use mobile wallets to pay bills than to make in-store purchases. That could change soon, however, as government agencies, travel and leisure companies continue to adopt technology to access identification cards and tickets stored on digital wallets, making carrying a physical wallet less of a necessity.
“The Mobile Wallet Challenge: Replacing Physical With Digital,” a PYMNTS and ACI Worldwide collaboration, examines consumers’ growing interest in using mobile wallets instead of physical wallets for in-store purchases at the POS. We surveyed 2,059 consumers between Aug. 18-25 to explore their comfort level and interest in using mobile wallets to manage their finances and store sensitive personal information.
Key findings from the study include the following:
• More than half of Generation Z consumers say that their mobile wallet can replace most of the features of their physical wallet. Two in five consumers believe mobile wallets can replace all items traditionally stored in physical wallets. Younger consumers are more likely to view a mobile wallet as a physical wallet replacement. Fifty-one percent of Gen Z consumers believe mobile wallets can supplant most or all physical wallet features. Older generations also see potential use cases for mobile wallets: 84% of baby boomers and seniors and 87% of Generation X consumers believe that mobile wallets can supplant at least some parts of a physical wallet.
• Mobile wallets pay the bills: 85% more consumers use their mobile wallets to pay bills than to pay merchants through QR codes and NFC tap to pay. While 49% of consumers have used their mobile wallet to pay bills in the last 12 months, just 27% use them to pay merchants with QR codes or near-field communication (NFC) tap to pay. On average, consumers paid at least three to four bills using their mobile wallets during that time span. Mobile phone bills are the most frequently paid bills via mobile wallet, with 44% of consumers having done so. Mobile wallets were also commonly used to pay credit card bills, home internet bills and utility bills.
• Physical wallets might be getting lighter as consumers find mobile wallets a more convenient way to store payment cards, ID cards and event tickets. PYMNTS’ research finds that slightly more than half of consumers have stored debit or credit card information from either a physical or virtual card in their mobile wallets. Millennials are approximately 2.5 times more likely to do so than baby boomers and seniors. In addition, 40% of millennials have used QR or NFC technologies in-store, making them the generation most likely to do so. On average, consumers have stored at least three different types of ID cards, event tickets or virtual keys in a mobile wallet, with millennials leading the charge once again.
To learn more about the growing interest in using mobile wallets instead of physical wallets, download the report.