Digital Wallets: Six Key Lessons
The markets for each type of digital wallet (i.e. online and mobile) continue to present their own unique challenges and opportunities for payment providers. While there is no right or wrong way for players to enter or operate in the space, a number of key lessons have emerged.
Reasons To Buy
- Plan your strategy by understanding the key challenges and lessons facing digital wallet providers using our objective insights.
- Gain insight into what regulators and industry bodies are doing to guide development within the space.
- See how Starbucks is leading the way in product design and the key lessons it offers in the provision of mobile wallet services going forward.
- Learn about the threat wearables pose to the mobile wallet market and how developments in this space stand to influence market dynamics.
- What strategies are digital wallet providers currently employing, and what key lessons do they highlight for future players?
- What are the key challenges facing the digital wallet market? What can be done to tackle them?
- How can digital wallet providers effectively overcome consumer concerns regarding security?
Given the high interest, high investment nature of the digital wallet market, we envisage a continued rise in the number of established and emerging players entering the space. It remains a widely held view among industry participants that once the hiccups being experienced have been ironed out, the market will take off.
While having an established brand stands to work in any digital wallet provider’s favor when it comes to potential adoption, other elements – such as value proposition, user experience, security, and ubiquity – will also play a crucial role in making one digital wallet more successful than others.
Wearable technology is being widely touted as the next big evolution of digital payments. While the use of wearables as a payment tool has further streamlined the customer checkout experience, the space faces similar – if not greater – value proposition challenges to mobile wallets.
- Executive Summary
- There is no one-size-fits-all approach to competing in the digital wallets space, but there are key lessons to learn
- Critical success factors
- Digital wallets offer both opportunities and challenges
- Digital wallet developments have intensified in the last two years
- The markets for online and mobile wallets remain at vastly different levels of development
- Digital Wallets: Six Key Lessons
- Lesson one: the future of digital wallets is very much mobile
- There is value in employing a mobile-first approach
- Lesson two: established brands with strong propositions will lead the digital wallets space
- Establishing trusted brand status will boost chances of mass adoption
- Social P2P payments are proving popular among emerging digital wallet brands
- Lesson three: multi-layered security is essential to the integrity of digital wallets
- Mobile technology is changing consumer attitudes to information security
- Industry standards are slowly being strengthened to reflect the changing times
- Tokenization and biometrics mitigate CNP fraud without further burdening consumers
- Lesson four: the digital wallet value proposition fails at being better than cash and cards
- Getting consumers to use mobile wallets remains a key challenge
- Mobile-centric customer engagement tools stand to garner merchant attention
- Lesson five: merchant exclusivity arrangements aid no one
- MCX's anti-competitive practices will further fragment the market
- APIs and SDKs ease merchant integration and promote digital wallet ubiquity
- Lesson six: wearables offer greater mobile wallet usability, but will struggle as a standalone payment tool
- Like mobile wallets, wearables designed as a multi-purpose lifestyle tool stand to gain more traction
- The compact nature of wearables inhibits their potential
- Abbreviations and acronyms
- Closed-loop digital wallet
- Digital wallet
- Floor limit
- Mobile network operator
- Mobile payments
- Mobile proximity payments
- Mobile wallet
- Open-loop digital wallet
- Online wallet
- POS terminal
- Interviews with leading payment companies and industry executives
- Our FSCI Survey has been expanded, providing new, improved, and valuable insight
- Mobile Wallet and Digital Content Analytics
- Online Consumer Payments Analytics
- Payment Fraud Customer Analytics
- Secondary research
- Further reading