Modern life requires virtually every one of us to have our devices accessible at all times. So how come most Americans still find using a credit card more convenient than a mobile wallet?
According to the report data, mobile wallet usage among Americans continues to grow in stores, but the percentage of customers who still say it’s easier to use a physical credit/debit card than a mobile wallet is on the rise.
Mobile wallets gain acceptance
Between the first quarter of 2021 and the third quarter of 2022, the percentage of Americans who said they had used a mobile wallet at some point in the previous three months increased from 38% to 49%. That increase reflects a significant erosion of some historical barriers to adoption.
The percentage of people who said they have heard of mobile wallets but never set one up dropped from 37% to 24%, and those who said they were concerned about security dropped from 25% to 21%. There was a small decrease (from 6% to 5%) in the percentage of customers who found it difficult to use mobile wallets.
Plastic still makes it possible
Ease of use continues to be an issue holding back the widespread adoption of mobile wallets. The percentage of customers who said they don’t use mobile wallets because it’s less convenient than a card actually increased from 47% to 49% in 2022. A potential reason for this increase? The appearance of contactless cards.
In October 2022, Visa reported in its quarterly earnings call that contactless had accounted for 28% of its US transactions, up from 20% in January 2022. This is good news for issuers that they lose brand recognition and pay more at the point of sale when customers pay with a wallet instead of a card.
The opportunity
The growth of contactless issuance has breathed new life into cards and bodes well for the continued preference for physical cards at the point of sale. Changing customer behavior is one of the most difficult goals for a business to achieve and, to the chagrin of some mobile wallet providers, the ubiquity of smartphone use has yet to translate into automatic adoption of mobile wallets.
While mobile devices have some appeal, contactless cards may hold off efforts by tech giants to co-opt the US payment landscape. As to how long this will be, just how long, and how issuers take advantage of this opportunity, will tell.
