Since Apple Pay stormed the market last year, digital wallets have been back in the public eye. But given the slow adoption rate for Google Wallet – first launched back in 2011 – are consumers, merchants and the wider market finally ready to ditch their purses and go digital?
In an article published by Wired, economist and strategist Max Wolff discusses the combination of factors he believes are behind the slow uptake. Structural and user-based issues remain the two core drawbacks, he notes, and while Apple is “a key enabler, it will neither be alone nor, the necessary winner.”
Since the launch of Apple Pay, there remains to be no clear leader in the duopoly of digital wallets. Yet slow adoption rates are to be expected. Apple Pay and other digital wallets require a behavioural change on behalf of both merchants and consumers. Moreover, infrastructure needs to catch up with payment methods. The expense of upgrading hardware coupled with a lack of consumer demand has deterred many vendors from making the change.
Wolfe explains: “There is always a self-re-enforcing cycle. Either, consumers demand and drive change through adoption or merchants build it and everyone hopes that they come.”
Apple have, however, at least rid digital wallets of consumers’ security fears. Using the appealing image of Apple, the tokenisation of card numbers and biometric Touch ID, “Apple Pay has jumped out to an early lead and breathed new life and urgency into this space.”
Furthermore, by not claiming user data as per Google and by assuming liability, Apple has “[removed] the merchant as a fraud breach point in the payment chain.”
While Apple Pay continues forging forward, Google’s recent moves with SoftCard from AT&T, T-Mobile and Verizon and Samsung’s purchase of Loop Pay “suggest the future is arriving fast.” The future itself however, depends largely on the consumer’s decision to either adopt or ignore.