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Data for today’s episode is provided by Mercator Advisory Group’s Report: A Functional Taxonomy of Digital Wallets: Today’s Version, Tomorrow’s Direction
Single-retailer Wallets Collectively Lead in Market Penetration:
- Single-retailer apps, which utilize a consumer’s card on file, frequently offer attractive rewards and incentives.
- Nearly four in 10 smartphone owners use single-retailer apps with embedded wallets.
- The most popular retailer-specific wallet used in-store is the Starbucks app, used by 19% of smartphone owners in 2020.
- The second most popular retailer-specific wallet is McDonald’s, used by 13% of smartphone owners in 2020.
- Dunkin Donuts and Target Pay were each used by 11% of smartphone owners in 2020.
- In addition to retailer programs, an array of mobile-based service providers incorporate wallet technology into their apps (e.g., Uber, Lyft, and Airbnb.)
- Service app-based wallets are used by a collective 38% of smartphone owners.
Mercator Advisory Group has been measuring consumer adoption of digital wallets for a decade. The questionnaires become more complex every year as new features and functions are added and new suppliers appear. Today there are wallets to support global card networks, national card networks, multiple merchants and single merchants. Some have added loyalty programs, others support ticketing and still others are adding support for car keys. There are also e-commerce buttons that act as wallets and merchant wallets that are adding financial services. Mercator Advisory Group’s latest research report, A Functional Taxonomy of Digital Wallets: Today’s Version, Tomorrow’s Direction, delivers a review of all the major digital wallets using a single consistent taxonomy to enable a more effective competitive evaluation of the feature/functions each wallet supports. This in turn suggests the key development and market direction being pursued by each wallet supplier.
“It is interesting to witness the expansion of wallets into new markets, from authentication to access control. Yet when one takes a step back, one doesn’t perceive these solutions staying focused on the payments market. They need to offer more benefits to win over banks, merchants and consumers,” comments Tim Sloane, Director, Emerging Technologies Advisory Service at Mercator Advisory Group and the author of the report.