Study highlights digital wallet market potential and current adoption barriers
"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," said Andrea Jacobs, comScore Payments Practice Leader. "This study delves deeply into the mindset of consumers with respect to their potential use of digital wallets, in addition to helping size the market opportunity. The study also provides guidance on how digital wallet providers, marketers, developers and retailers can contribute to growing adoption of this technology."
The study is based on a unique research design combining comScore's opt-in panel of 1 million US consumers and two separate surveys of more than 2,000 US Internet users conducted in November 2012. To better account for the intent of consumers to use digital wallets, the study first removed the awareness gap that existed between users and prospects by introducing respondents to various digital wallet offerings first-hand.
Consumers are receptive to digital wallets, but require more education of benefits
The current digital wallet landscape remains fragmented among providers because of low consumer adoption outside of PayPal, with only 12% of consumers claiming to have used a digital wallet other than PayPal. However, study results indicated that the digital wallet market opportunity could eventually reach 1 in 2 consumers as consumers become more aware of the offerings and educated on their benefits.
| Consumer Awareness and Usage of Digital Wallet Offerings November 2012 (Source: comScore Digital Wallet Road Map 2013) | ||
|---|---|---|
| Digital Wallet | Percentage of Total Respondents Aware of Digital Wallet | Percentage of Total Respondents Who Used the Digital Wallet |
| PayPal | 72% | 48% |
| Google Wallet | 41% | 8% |
| MasterCard PayPass Wallet | 13% | 3% |
| Square Wallet | 8% | 2% |
| V.me by Visa | 8% | 2% |
| ISIS | 6% | 1% |
| Lemon Wallet | 5% | 1% |
| LevelUp | 5% | 2% |
One clear barrier to use of digital wallets is that the concept is often difficult to convey and prone to misinterpretation. Even after being asked to review the websites of particular digital wallets, respondents across all wallet brands still scored an average of just 45% in terms of demonstrated level of understanding.
Security remains a top concern that can be addressed more clearly by wallet marketers
The study revealed that security remains a top consumer concern, but that a significant portion of consumers is not aware of security features inherent in digital wallet usage. While 93% of consumers would prefer to use a digital wallet that has to be unlocked before use, an average of just 57% of respondents across the brands studied realised - after having reviewed the digital wallet website - that this locking feature was available. Some digital wallet providers were more successful than others in communicating the availability of this feature, with 71% awareness among Lemon website visitors versus 42% among LevelUp website visitors. The ability to improve communications of features addressing consumer concerns, such as security, could remove an important hurdle to adoption.
| Percentage of Respondents Aware of Wallet Locking Features After Seeing Digital Wallet Websites November 2012 (Source: comScore Digital Wallet Road Map 2013) | |
|---|---|
| Digital Wallet | Percentage of Respondents Aware of Wallet Locking Features After Seeing Digital Wallet Websites |
| Average Across Wallet Brands | 57% |
| Lemon Wallet | 71% |
| PayPal | 69% |
| V.me by Visa | 61% |
| Google Wallet | 58% |
| MasterCard PayPass Wallet | 58% |
| ISIS | 56% |
| Square Wallet | 43% |
| LevelUp | 42% |
"Low awareness, understanding of benefits and availability among retailers are among the key barriers to adoption of digital wallets. While these impediments may seem like a steep hill to climb, we have seen this story play out before in the financial services industry. 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," added Jacobs. "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 realise its full potential. In order to win over consumers, wallet marketers, providers, developers and retailers must work together to address each of the aforementioned barriers."
About the 'Digital Wallet Road Map 2013'
The 'Digital Wallet Road Map 2013' is a report based on comScore's research panel of 1 million US consumers and attitudinal insights gained from two comScore surveys of over 2,000 US online consumers, each conducted in November 2012. Based on a unique research approach, the report analyses consumer intent to use digital wallets and provides insights into how to drive consumer adoption.
To purchase the report or download a free overview of the report and methodology, please visit http://www.comscore.com/digitalwallet2013.