New KUBRA Research Confirms Digital Wallet Use Is Growing
August 25, 2022
This year, KUBRA researched how, when, and why consumers use digital wallets. As we analyzed the data, barriers to digital wallet adoption were also revealed. This nationwide survey captured usage behavior and the obstacles to increasing adoption, giving billers insight into what they need to do to entice more customers to use digital wallets to pay their bills.
Are you a biller who has invested in a digital wallet but hasn’t had much uptake, or are you considering adding them as a payment option? The information below will help you overcome (or avoid) some of the barriers to adoption and ensure you’ve got the right solutions to meet customer expectations.
Digital Wallets Are Taking Center Stage
Consumers want access to digital payments, plain and simple. Mobile payment apps, digital wallets, and online purchases are all popular among consumers because they’re safe, convenient, and easy to use. It’s been 25 years since the first digital wallet was introduced, and since then, they’ve faced some severe headwinds regarding adoption. But a definite shift is happening. Our research found that so far this year, 65% of consumers used digital wallets to pay for their purchases, and 83% were moderate to extremely likely to recommend digital wallets to someone they knew. As a biller, you should be aware that while digital wallets used to be a nice-to-have, they’re quickly becoming a customer expectation.
Consumers Are Using Digital Wallets Frequently, and PayPal Is Their First Choice
Almost half of consumers who use digital wallets stated they use them regularly. 6% use them daily, 22% multiple times a week, and 17% once per week. PayPal is the leading digital wallet, with 51% of consumers choosing to use it, followed by Apple Pay (34%), Venmo (31%), Google Pay (18%), and Amazon Pay (13%). Since 35% of customers use 2-3 digital wallets to make payments, and 5% use more than three digital wallets, you should consider offering more than one to boost customer satisfaction and adoption rates.
Digital Wallet Use for Bill Payments Is Lagging
Despite the surge in digital wallet use for purchases, just 37% of consumers have used them to pay a bill, leaving 48% who haven’t used a digital wallet to pay a bill and another 5% who said they aren’t available through their biller. Here’s how the 37% are using them: 25% of consumers use digital wallets to pay for utility bills, 14% for insurance payments, 10% for parking tickets, and 9% for tax payments. If you’ve added a digital wallet, expect adoption to continue to grow as younger, tech-savvy generations become bill payers.
The Whys and Why Nots
Convenience is the number one reason for 62% of consumers. Since payment details are stored securely on their devices, online transactions are streamlined, and users can pay quickly. An additional 57% of consumers stated they use digital wallets because they’re easy to use, and 44% because they save time. Not having to type in payment details each time they want to pay a bill is a huge selling point, especially since all their personal information is safely saved on their devices.
Security issues are still the number one reason holding 33% of consumers back from using digital wallets. 31% still believe that other payment channels and methods are easier to use, followed closely by 24% of respondents who said that digital wallets are unavailable through their billers, and that’s why they don’t use them. Finally, 14% of respondents said they don’t use digital wallets because they don’t know how, and 13% said they’re uncomfortable with new technology. A lot of the concerns holding consumers back from using digital wallets can be dispelled with education and awareness campaigns emphasizing how safe and easy they are to use.
The Benefits of Making Digital Wallets a Priority
You and your customers will enjoy various benefits when you adopt digital wallets.
The top benefits for customers are:
- 29% stated that it helped them make payments on time.
- 26% indicated that offering digital wallets would improve their satisfaction with their utility company.
- 22% said that it shows that their utility is innovative.
- 15% said it increases their trust and confidence in their biller/utility company.
The top benefits for billers are:
- Giving customers a convenient way to pay their bills without entering card details will improve customer satisfaction.
- Making it easy to pay bills results in billers getting paid faster, enhancing cash flow.
- Meeting the growing demand for digital payment options.
Digital Wallets Are Here To Stay
At 31% of the population, Gen Z is becoming a more significant portion of your customer base. With that in mind, it’s logical to assume that the demand for digital payment methods will only increase, including digital wallets. If you’re focused on continuing to meet your customers’ expectations, you must stay on top of current billing and payment trends and expand payment options that align with your customers’ current preferences and behaviors.
Read our white paper for a more detailed look at our recent digital wallet research.
Source:KUBRA’s 2022 Digital Wallets Guidebook.