Are Americans Luddites when it comes to payments? Are we falling behind the rest of the world when it comes to the use of mobile wallets?
In short, the answer is yes. Many parts of the world have embraced mobile payment options at a much higher rate than the U.S. This finding shouldn’t come as a surprise to anyone involved with payments.
Are recent article in the London Post, Will Digital Wallets Completely Dominate Payments? Discusses how mobile payments have taken hold in many countries around the world. The reasons he cites are the same we’ve heard since the mobile wallets were introduced years ago – increased security, convenience, transaction speed, shorter and faster checkout queues, etc.
The author points out there are several other reason for their popularity:
First and most important, digital wallets allow users to make quick and easy purchases in-store and online, withdraw cash from ATMs, and send money peer to peer. All of that is followed by great convenience and flexibility in payment choice.
Aside from that, e-wallets are very useful due to their same-day transactions (and top-notch security). Most people who shop online or play online games know all of the benefits of not waiting for traditional banking procedures that can sometimes last for days. On top of that, their data is well encrypted. The failing of traditional banking is especially seen in one industry – online casinos. Customers are turning away from the traditional bank (or “wire”) transfer in their droves and towards e-wallets like PayPal, Neteller, and Skrill – relative newcomers to the finance sector. And usual reasons behind it are faster withdrawal times, money being separate from the bank (unlike paying with credit and debit card), great security, and similar.
Maybe it’s me but I would have liked to see some hard numbers behind these usage proclamations. That is to say I’d like to know what percent of each population he mentions actually use these technologies to pay. I’m not trying to throw shade, just trying to get some empirical evidence for comparison purchases. Perhaps I’ve been jaded by the past 10 or so years where, every year, industry people have announced “This is going to be the year of the mobile wallet.”
All that said, I do think that the U.S. is a bit of a dinosaur when it comes to the use of the mobile wallets and I’ve written about it recently explaining why I think Americans are slow to adopt this technology. There is no one simple answer.
Personally, I think the slow adoption of mobile payment adoption has more to do with stakeholder confusion (not just consumer but merchant and FIs too) due to a lack of clarity and multiple players and platforms more so than Americans being Luddites.
Overview by Peter Reville, Director, Primary Research Services at Mercator Advisory Group
