NEW YORK—A lot is happening with mobile wallets—Apple Pay has launched, Google is in talks to acquire Softcard, and Samsung is rumored to be introducing a mobile wallet of its own.
However, a new report indicates that mobile wallets are far from becoming the standard
The study from 451 Research points to low consumer interest in digital wallets and high consumer concerns about security, ease of use and widespread acceptance among merchants, The Street reported. The research also found that during the past year, the percentage of consumers who say they are likely to make mobile payments increased by just two points, from 22% to 24%.
"With the percentage of consumers likely to make a mobile payment only increasing two points between December 2013 and 2014, it's evident that mass-market adoption remains a distant reality," 451's Jordan McKee wrote in the report. "This low take-up can be attributed to the absence of an available mobile payment system that provides a combination of security, convenience and ubiquitous acceptance on par with, or in excess of, current-generation payment methods."
The Street stated that McKee pointed to a report last month from ChangeWave Research that found with mobile payments, 84% of consumers are concerned about secure storage of financial-account information, 66% are concerned about ease of use and convenience, and 64% are concerned about the widespread acceptance of the app among merchants.
Until a mobile wallet can address these areas sufficiently, mobile wallets will remain a niche product, according to The Street.
"Looking out across the current landscape for mobile wallet applications, no single offering exists today that fully addresses all three of these minimum consumer demands—not Google Wallet, not PayPal, and not even the industry's beloved Apple Pay," McKee wrote.
Apple is making considerable headway when it comes to security, The Street explained. One of three consumers who use Apple Pay cite strong security as the primary reason for using it, and 32% of all consumers said Apple Pay's security and privacy features make them more likely to use the product over other mobile-payment services.
As for Apple, however, McKee said the company "has done very little to build out merchant relationships and has largely tapped into the existing and limited contactless infrastructure already in place. "With a constrained acceptance network, Apple Pay's value proposition it diminished. There are simply very few opportunities to use the service."
McKee also said that Apple could focus more on value-added services such as loyalty programs and discounts, noting that Apple Pay is in “the first inning of its evolution, with a variety of additional services coming in the foreseeable future."