Will Mobile Wallets Ever Be Wallet Of Choice?

Vantiv and iModerate know that the word wallet has come to mean much more than just the accessory thrown in a purse or back pocket.

Today, the word can also describe a mobile app that stores digital versions of a person’s payment cards, loyalty cards, gift cards and even coupons — enabling payment to take place with just a tap or scan. While mobile wallets can be a quick and convenient option to help consumers expedite checkout, keep their information secure, and streamline retailer discounts and loyalty rewards, the adoption of mobile wallets continues to fall short of what was originally expected.

To find out why, Vantiv and iModerate joined forces to analyze more than 800 participants that use — and don’t use — mobile payments. The Tale of Two Wallets eBook is the culmination of their research and sheds light on why mobile wallets have yet to gain enough traction to actually replace traditional wallets.

The eBook reveals four major takeaways that may help to understand what makes a consumer choose one wallet over the other and what barriers may be standing in the way of mobile wallet adoption.

1. How Mobile Wallets Can Grow Up

Swiping card and paying with cash are behaviors with which consumers are very comfortable, and making a major change to that takes time.
Bringing on a new way to pay, which also relies on the use of mobile devices as well as new behaviors for both merchants and consumers, is bound to have kinks that will have to be worked out of the process.

Vantiv’s research revealed that many users feel annoyed and embarrassed in those moments when their mobile payments just don’t work as smoothly as they should. According to the study, these barriers and frustrations have a direct impact on the usage of mobile wallets.

Though many users understand that technical glitches and issues can come with the territory of being an early adopter, that doesn’t overshadow their belief that using a physical card or cash for a transaction would have been easier when those issues arise.

Besides technical glitches, users also found that paying with mobile devices can also mean dealing with uniformed employees, inconsistent availability and the concern that their personal information could be compromised if they lost their device.

2. Can Convenience Drive Adoption?

Early adopters of mobile payments are all about convenience.

Many cited both time savings and convenience as two of the biggest benefits of payment with a mobile device versus rummaging around for a physical wallet while waiting in the checkout line.

With a scan or a tap of a mobile device, the transaction itself is typically sped up for both consumers and the cashiers on the other side of the register. The speed and efficiency of payments was particularly important to 25-to-34-year-old participants in Vantiv’s study.

“Mobile payments help simplify consumers’ checkout processes. Many already have their phones on hand, making transactions easily accessible and very convenient,” the eBook stated.

“Heavy bags and cumbersome wallets no longer weigh mobile payments users down. Adopters don’t have to carry cash and cards when they leave their homes, and their mobile payment methods are always accessible.”

Not surprisingly, millennials also find themselves being the most comfortable with relying on technology to make a payment and also value being free from carrying around bulky possessions.

“Mobile payments, in my opinion, are a very convenient and efficient way of speeding up the process of payment. Some positive experiences that make me appreciate the ability to pay from my phone are when everything goes smoothly throughout the payment,” a participant in the study said.

3. Keeping Mobile Secure

There’s no doubt that security concerns weigh heavy on the minds of non-users of mobile payments.

The fear of the unknown is also a significant barrier to adoption for this group.

The eBook explained that even non-users with general familiarity with mobile payments still feel that they are not adequately informed about them.

In many cases, non-users of mobile payments are comfortable with the traditional methods of payment available and remain wary of the shift towards digital payments.

One participant shared this: “I don’t really have hesitations regarding mobile payments. I guess I’m just not very familiar with them. I use PayPal from time to time but am just not familiar with any other mobile payment methods.”

But the lack of understanding and information surrounding mobile payments could present an opportunity for providers to reach non-users in a different way.

4. Giving Mobile Wallets Room To Grow

Despite the many reservations that may come with mobile payments, Vantiv’s research showed that respondents agree that mobile payments will become more widespread in the future.

In order for mobile payment adoption to grow, the data revealed that users of mobile payments need smoother payment experiences, consistency and security support. On the other hand, non-users will require a meaningful and lasting motivation to change their current behavior and adopt the new technology.

Vantiv suggests that mobile payments providers deliver on hard facts to convince shoppers that mobile payments are secure, raise awareness of the brands that use mobile payments and track the growth of mobile payments to show that people find them both secure and convenient.

“For existing users, it’s about ironing out the wrinkles in the current process. And for people who aren’t yet using mobile payments, it’s about building trust and familiarity,” the eBook explained.