Study Shows Slow Adoption Rate of Digital Wallets Due to Lack of Understanding

[dgstorm]

Supposedly a new study indicates that a bright future is in store for digital wallet services, like Google Wallet and ISIS, but for now the adoption rate is still slow due to a perception problem. The study from ComScore concludes the primary problem with the slow adoption of digital wallets is that people don't understand the concept yet, or they don't fully understand the benefits. The other factor is simply lack of awareness of the tech altogether. Only 51% of U.S. consumers are even aware of the technology, and only 12% of the folks who know about it have actually used it. Here's a quote with some additional detail,

ComScore analyzed data from a panel of 1 million U.S. consumers and two separate surveys of U.S. Internet users in November 2012 to arrive at its conclusions. For purposes of the study, the firm defined the digital wallet as an entity that stores a virtual copy of wallet content for use in online or offline transactions. The full report is available for purchase, but CNET obtained a copy from ComScore for review.

"Digital wallets represent an innovative technology that has not yet reached critical mass among consumers due to a variety of factors, including low awareness and a muddied understanding of their benefits," ComScore Payments Practice Leader Andrea Jacobs said.

Should the digital wallet find a foothold with consumers, it will be PayPal's market to lose. Seventy-two percent of survey respondents said they were aware of the eBay-owned payment facilitator's digital wallet and 48 percent indicated that they had used the technology. Compare that to the web and mobile wallet from Google, which placed a distant second with 48 percent awareness and an unremarkable 8 percent usage among survey participants.

The rest of the digital wallet-makers, ranging from credit card companies such as MasterCard and Visa to startups like Square and LevelUp, all scored so low it's safe to say that people have no idea what these offerings are or why they should use them.

Part of the digital wallet adoption problem appears to be linked to security concerns around hacking or phone and identity theft, issues that providers need to do a better job at addressing. ComScore found that 93 percent of respondents said they would prefer to use a digital wallet that has to be unlocked before use, though just 57 percent were aware that this type of feature was available -- even after they reviewed each brand's website.

Jacobs, however, hasn't written off the future potential of digital wallets. "There was a time when consumers were reluctant to use ATMs for similar reasons, and, today, look at how far we've come since the 1970s and 1980s," she said. "It would seem that the future is bright for digital wallets, but it will require deliberate execution of strategies such as sound marketing for this technology to realize its full potential."

What do you guys think of the concept of digital wallets? The most common complaint is security issues, yet a way to digitally pay for your meal at a restaurant without having to give your card to a "complete stranger," should be far more appealing in theory. What do you guys think of the analogy comparing digital wallets to ATM cards? Does it hold water?

Thanks for the tip!

Source: CNET

[ntrddragn]

Slow adoption cuz ppl don't know about it period. Google doesn't do a good job at "marketing" the concept. And we have vzw blocking the concept. If this was on an iPhone they would market the hell out it. I mean the made a commercial for noise cancelation mic for goodness sake.

Google doesnt market how safe it is also since ppl r concern about security. I did saw a video how someone grab the cc # off of a lot of ppl with the pay pass credit card without seeing their card. He just tap their wallet or purse and was able to grab it. And they were told to call the cc company to never send them a cc like that again. Or were instructed to remove the magnet chip.

[jstafford1]

I would use it but I live in the 1900's it seems here in central Ohio.

Sent from Democles Base.

[johnomaz]

I have no plan on using it because if you happen to lose your phone, the battery dies or it breaks, you are out of luck. You may have the actual plastic cards at home somewhere, but if they are at home and your phone gets stolen at a bar, you're out of luck. I'm not talking about the thief spending your money, but you no longer have a means to pay for anything. There are times where my phone will randomly eat through its battery in a few hours when normally I can have it on for 15 hours of use and have 30% when I go to bed. Also, very few places take the NFC payment methods. Also, what is the big deal with using NFC anyways? I forget the credit card company that put an NFC chip in their cards so you could tap and not swipe it and it never caught on. Now I have to get my phone out, unlock it, open the app, hope your data connection is good and then tap your phone. Or I could get my wallet out and swipe my card.

I just don't see it as an easier or more efficient method of payment. I see it as a novelty, a conversation starter for your inner nerd. I get this is just my opinion, but checks came out because cash was inconvenient. Imagine carrying $5000 to BestBuy to buy something. A check was easier. Now, credit cards/debit cards came out because personal checks took forever in lines. I think using your phone is a step backwards in efficiency. I'd rather have a single card that has a flexible display on it (hurry up Samsung) where you could touch which account you want to use and either tap it via NFC or swipe it. No having to log in, nothing. Use a finger print reader so it knows its you before the purchase and use wireless charging tech at home to charge it. But even that would have draw backs.

[kodiak799]

Yeah I think there are a lot bigger reasons for slow adoption. #1 how widespread is it even at retailers? If it's anything much less than 95% then you still need to carry a CC so why bother?

Not sure about losing it since you could lose your wallet (although I'm far less likely to put my wallet on the table and leave it there where I forget it). Security I'm not so sure about, but there's also not a massive number of people doing online banking (especially for people over 40/50).

The battery dying is a great point.

But as far as convenience goes, this isn't any great saver. I still need my wallet for my license and petty cash (and a few insurance cards). So it's no big deal to carry a CC, and it's awfully quick and easy to swipe a CC (no pin).

Anyway, until it's acceptable everywhere (including airport security and the cops) to have a digital license on your phone, and the medical info (which I guess you could do) this tech is going nowhere. It has to be the WHOLE wallet, with everything accepted almost everywhere.

[Dusty]

Credit cards weren't accepted everywhere overnight. Think of it as an added convenience that is there when you choose to use it. Why is that so bad?

As far as losing it... you can say the same thing about losing your wallet. At least with this they have to hack it to have any chance of getting any useful data, unlike your wallet where all a person has to do is open it and pull out your license and credit card.

Just like you carry cash for when you can't use a credit card this could just be an alternative. I use it quite often, by the way, when I stop at a 7-ll probably 3-4 times a week.

I like it.

[kodiak799]

Like I said, as long as we need a physical wallet for something or something else, there's absolutely no inconvenience related to a CC that can be improved upon. In that regard, and some others, digital wallets are an inferior alternative. That's the main reason adoption has been so slow and will be a long time before it's more than a novelty.

[bazar6]

I'd be up for adopting it if retailers said theywill eventually adopt the technology. But they aren't because there's so many choices (Paypal, Wallet, ISIS, PayPass, etc), if they need to have a scanner for each platform, then thats a ton of money to try to make everyone happy; so wait it out for an industry standard (like what happened with HD-DVD vs BluRay)

And I think more people have used the Google Wallet software more ofen than they realize because you have to use it when you purchase anything through the Play Store... that may have been different than what the study was looking at, and it's most probably Google's fault for not branding and pushing Wallet more than it currently is.

[dezymond]

I did try it once and it was convenient, but if I happen to lose my phone I don't want to lose my "wallet" either That's my main concern, it's bad enough I've lost my phone, I don't want the added stress of contacting my CC companies.

[ntrddragn]

i used mine quite often before. I stop using it after switching ROMs and constantly having to use the work around since it was blocked by vzw. I got annoyed and worried that it wouldnt work when i go to use it. So I just stop.

I'll just wait until the iPhone has it and then it would be more acceptable to use it. LOL

here is the video i was speaking of..stuff like this would scare lots of ppl.