Mobile wallets may be gaining in popularity, but adoption is slow and users aren't necessarily shoppers, according to "U.S. Mobile Wallet Roundup: Gauging the Future Potential of Today's Solutions," a new report by the Yankee Group.
Although two-thirds of consumers are interested in learning more about transitioning to a mobile wallet platform, that interest is simply not translating into adoption.
"The harsh reality is that despite billions in investment across the ecosystem, adoption of such mobile payment technologies has been far from illustrious," said Jordan McKee, Yankee Group Analyst. Just 16 percent of mobile device owners have used their phone to make an in-store payment in the past three months. And of those using mobile wallets, 73 percent are doing so fewer than five times per month.
"Clearly, the way we pay for goods and services is not slated to change anytime soon," said McKee. "But although cash and cards may enjoy dominance for some time, with fully two-thirds of consumers remaining interested, it's important to recognize that the mobile wallet is far more of a latent opportunity than a pipe dream."
Traditional payment methods continue to reign supreme but the market is becoming more crowded and the leaders, Google Wallet (NASDAQ: GOOG) and PayPal (NASDAQ: EBAY), are being joined by smaller start-ups.
PayPal has taken an early lead in the mobile wallet race, according to the Yankee Group. With 15 percent of consumers having used its application in the past month to make an in-store transaction, PayPal enjoys nearly four times the adoption of its closest third-party wallet competitor, Google.
Prioritizing integration with SMB POS systems can lead to near-term adoption, surmises the report's authors. Smaller merchants see greater value in third-party wallet solutions as compared to their upmarket counterparts, according to the report.
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