Report: Consumers Use PayPal, Other Digital Wallets Lag
Feb. 7, 2013
Outside of PayPal, awareness of digital wallets in the U.S. is low, but potentially half of all consumers will use them in the future, according to a new report from digital measurement firm comScore. Other than PayPal, only 12 percent of U.S. consumers report having used digital wallets, which store a virtual copy of the contents of a consumer’s physical wallet to facilitate online or offline retail transactions (48 percent report having used PayPal).
“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, leader of comScore’s payment practice.
The “muddied understanding” was apparent when comScore asked its consumer panel to review the Websites of several digital wallets. Even after “educating themselves,” respondents scored an average of just 45 percent in terms of demonstrated level of understanding.
“Low awareness, understanding of benefits and availability among retailers are among the key barriers to adoption of digital wallets,” Jacobs said. “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.”
For the time being, however, adoption remains anemic. Other major digital wallet initiatives lag far behind PayPal in terms of the percentage of consumers who have ever used them: Google Wallet, 8 percent; MasterCard PayPass Wallet, 3 percent; Square Wallet, LevelUp and V.me, 2 percent.