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Adoption barriers to digital wallet uptake identified in new report as PayPal continues to dominate market awareness

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By John Glenday, Reporter

February 5, 2013 | 2 min read

A comScore report conducted into the nascent digital wallet market has found that enormous potential exists, but this is being stymied by current adoption barriers.

Digital Wallet Road Map 2013 measured consumer awareness, perception and intent to use the payments service, finding that the technology was only known of for 51% of US consumers for wallets other than PayPal.

The new report released by comScore, ‘Digital Wallet Road Map 2013’ found that from two separate studies of over 2,000 US internet users, 72 per cent of respondents were aware of PayPal, while just under half (48 per cent) has used the service in comparison with the nearest competitor, Google Wallet, which scored a 41 per cent awareness with only eight per cent having used it.

Other mobile wallet services highlighted by the survey included Mastercard’s Pay Pass wallet, which 13 per cent were aware of, but only three per cent had used. Meanwhile Square Wallet and V.Me from Visa both had an eight per cent awareness and usage rate of two per cent while ISIS had a six per cent awareness measurement and a one per cent usage.

The final two mobile wallets were LevelUp and Lemon Wallet which both had five per cent awareness and a two and one per cent usage rate respectively.

According to the report, one of the barriers to digital wallet use was that conveying the concept was found to be ‘difficult’ and easily misunderstood, with 45 per cent of respondents demonstrating a level of understanding having reviewed the services and websites.

Security was another barrier, with 93 per cent of consumers found to prefer to use a digital wallet that needs to be unlocked before using, although only 53 per cent realised that this function was available after studying the products.

“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 muddled understanding of their benefits,” commented Andrea Jacobs, payments practice leader for comScore.

The survey found that only 12 per cent of consumers had claimed to use any other mobile wallet than PayPal, and also that as high as one in two consumers could take up the proposition as awareness of their benefit grows.

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