It has been a slow start for digital wallet adoption, but could 2016 be the year we make the shift?
The emergence of Apple Pay, Samsung Pay and Android pay have pushed digital wallets back into the limelight. According to a recent study conducted by Citi Retail Services, shoppers are now "embracing digital wallet adoption at a growing pace, due in large part to convenience and ease of use."
Leslie McNamara, the managing director of Partner Management, Citi Retail Services discusses this change in behaviour. She believes that it is due to "Tech-savvy shoppers [who] are increasingly demanding seamless, omnichannel retail experiences."
Now, big brands have always been quick to adopt technology trends. But for small businesses, it may seem like an expensive and unnecessary expenditure. But is the trend reflective of consumer attitudes?
A significant portion of respondents to the Citi study reported that they are yet to use a digital wallet because: there are easier methods of payment (47%), do not see the benefit (45%), safety concerns (45%) and lack of information (44%).
On the other hand, 66% said they "could be convinced" to adopt a digital wallet if they were "educated on the benefits."
For clarity, Small Business Trends met with two industry experts, Laurence Cooke, CEO of nanoPay, a digital payment technology company and Sean McQuay, credit card expert with NerdWallet, a financial education and resource site for consumers.
McQuay encourages small businesses to incorporate POS systems. "With the shift to EMV (i.e., chip card readers), most point-of-sale terminals come with near field communication (NFC) capabilities, which enables contactless payments", he said.
However, adoption is contingent to a businesses' needs. For example, McQuay explains that while the technology may be suitable in hardware store, it may not be in a restaurant.
That being said, small businesses who do opt for the update may see numerous benefits. McQuay explains: "'Surprise and delight' is a soft benefit that lets the customer know you are up to date and put a premium on keeping their data safe and secure," McQuay said.
While McNamara believes that: "There's no question 2016 will be a pivotal year as digital wallets gain more widespread acceptance", Citi's experts both concur that full adoption is still a thing of the future. Adoption is driven by demand and as Cooke states, "Until I can get my entire wallet on the phone, I see no point in replacing any part of it".