Digital Wallet Providers Need to Look Beyond Tap-and-Pay

The proliferation of smartphones has set the stage for increased adoption of digital wallets, especially outside the U.S., where using alternative payment methods via mobile device has a head start in many markets. In a new report focused on Europe , Boston-based consultancy Aite Group examines the digital wallet landscape, traditionally dominated by banks but increasingly marked by non-bank entrants. One of the main takeaways for all the constituencies (banks, fintech companies, mobile network operators, merchants and card networks) is to look beyond contactless payments at the POS for other ways to deliver value through digital wallets.

“Successful digital wallet providers will be those that offer consumers ease of use, peace of mind, and the ability to transact anytime and anywhere,” said Ron van Wezel, senior analyst for Aite Group and author of Digital Wallets: Provider Strategies to Meet Customer Requirements.

For different providers, how they deliver that flexibility will vary, according to the report. For some, especially “the Pays” (Apple Pay, Samsung Pay, Android Pay), the report predicts their fastest growth may come from in-app and browser-based online payments. For merchants, while the report acknowledges that there are some in Europe that could successfully launch their own wallets, Aite advises them to “focus on the shopping experience and select the right third-party wallets.”