Popular Payment Methods Are Struggling

Posted by iGaming Buzz on August 20th, 2019

The answer to the question of how successful mobile wallets are depends on who you ask. In early August, Goldman Sachs analysts announced that the introduction of mobile wallets has so far been "impressive by almost all objective standards." However, the note said that although Apple Pay dominates this market (it accounts for 90% of all contactless payments from a smartphone in the USA), this payment system is still difficult to gain in popularity. According to analysts, only 27% of U.S. eligible consumers have ever used Apple Pay, and only 8% used it once a week.

A recent PYMNTS.com survey showed similar results: according to it, consumers forget to use the mobile wallet installed on their phone, even if the store accepts it. So mobile wallets will never become popular? Do not hurry. According to other polls, in the future, these payment methods will see steady growth. A recent study by US Bank showed that now more consumers prefer to pay through a digital application (47%) rather than cash (45%). In particular, 49% of millennials prefer digital payment methods. According to the forecast of Juniper Research, by 2022, 50% of all transactions through POS-terminals will be made through contactless payments, this year they account for only 15%.

How Mobile Wallets Fight for Popularity

There seems to be no single answer to the question of what prevents mobile wallets from achieving more user activity. Apparently, there are many small reasons - from old consumer habits that are difficult to overcome, to the lack of information of people who simply don’t know where which payment methods are accepted.

Widespread adoption in retail outlets is a problem that Apple (NASDAQ: AAPL) seems to be concerned about in the first place. Since Apple Pay was created, the company has focused on opening new markets and points of acceptance for this payment method. During a third-quarter conference call, CFO Luca Maestri announced that Apple Pay was launched in Italy this May and will appear in Denmark, Finland, Sweden, and the United Arab Emirates by the end of the year. In the second quarter, Apple announced that Apple Pay was available in 4.5 million retail outlets in the United States and 20 million worldwide.

Problems remain

Mobile wallets compete with previously available payment methods. Many consumers still prefer credit cards for making iDebit casino deposit and cashback that they offer (in the USA and other countries, not all bonus credit card programs apply to payments using mobile wallets, some cards do not work with mobile wallets). In a recent survey, 40% of respondents cited this reason as the main incentive to order a new credit card. No mobile payment system has yet offered consumers anything like this. Another problem is that none of these wallets is a means of payment, regardless of the phone model, operating system or store.

This is one of the main reasons PayPal believes it is ready to win this battle. Another, unexpected, reason for the difficulties of mobile wallets is the competition in the digital payments market on the part of retailer applications. It is worth noting here the investments of Starbucks, as well as Domino's Pizza, which in recent years has created the gold standard in the field of digital and mobile innovations.

We are at the very beginning of the era of mobile wallets and payments, and as the boundaries between retail outlets and e-commerce are blurring more and more, we can be sure of only one thing. The consumer will undoubtedly win as a result of the race for a more comfortable and faster shopping process.