And the digital wallet revolution continues to charge forward. Though more than 80 percent of Americans believe smartphones as portable cash and credit card machines are the future of financial transactions, the transition, at least in the U.S., has been relatively slow. In 2010, just 5 percent said they used their mobile phone as a method of payment. Last year, according to Nielsen, that number crept up to 9 percent. Considering how rapidly audiences for other mobile functionalities have grown in the past couple of years, many by 50 to 200 percent or more, this jump is statistically significant but not entirely impressive. In a recently-released Pew study on the future of money, 35 percent of respondents said that by 2020 mobile payments won’t “have gained a lot of traction” and that “there will not be a major conversion of money to an all-digital-all-the-time format.”
An explanation for why the digital wallet hasn’t caught on, particularly with the millennial set, is how limiting it is. Google Wallet, which launched in 2011, is a perfect example of this. The most high-profile platform of this kind, Google Wallet has stagnated in large part because it requires users to have a Sprint contract, a Citi bank account, and one of four particular smartphone models. Great for a pilot program, maybe, but beyond that, pretty useless for the rest of us. Another reason for hesitation to adopt the digital wallet is trust–or lack thereof. With reliable banks like Citibank and Bank of America, among others, having experienced major security breaches in the past year, putting hundreds of thousands of customers’ money and private information at risk, it’s no surprise people are hesitant to adopt anything new when it comes to safeguarding and spending money.
Last April, from AT&T, T-Mobile and Verizon, another digital wallet iteration, Isis, launched its first pilot program in Salt Lake City. Focused on point-of-sale transactions via near-field communication (NFC) technology (aka, “wave to buy”), Isis, which is now in Austin, TX, as well, is cleared to work with almost all major credit cards, including Visa, MasterCard, American Express and Discover, as well as bank accounts at Chase, Capital One and Barclays.
The new kid on this block is V.me from Visa, which announced yesterday that its digital wallet soft launch would take place later this year in Great Britain, Spain and France. Where V.me’s value-added in this market lies is in its extremely sophisticated payment technologies and streamlined processes, all courtesy of Visa. V.me’s availability here in the U.S. will likely follow the European pilot program, though no further details on the international timeline were provided in the company’s press release.
L2 emails keep you up to date on how brands are leveraging digital to grow their businesses.
Join Our EMail List