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As wallet interest rises, consumers go with players they know

PayPal, Amazon now top consumers’ list for trusted digital wallet

As wallet interest rises, consumers go with players they know

The frenzy of activity in the mobile payments and digital wallet space is beginning to pay off in the form of consumer awareness and interest, according to Forrester data.

Based on a survey of more than 4,000 respondents, 31% of U.S. online consumers who own a mobile phone are interested in or already use mobile payments for in-store purchases, up from 18% in 2011.

However, while 61% of U.S. consumers have heard of a digital wallet, only 11% use one, an indication that wallet providers still have a lot of work ahead to enable easy adoption, writes Senior Analyst Denée Carrington in new research detailing digital wallet strategies.

Who will lead the pack? According to Carrington, while there is opportunity for financial institutions to deliver added value to their customers via digital wallets, they will face stiff competition. Why? Because consumers currently most trust digital wallets from brands they associate with payments.

For instance, consumers most trust PayPal (38%) to provide a mobile digital wallet, followed by banks and credit card issuers (35%), and (23%).

In her new research, Carrington outlines digital wallet strategies from both the financial institution and merchant perspective. For financial institutions, she recommends getting into the market with a partner-branded wallet or a financial institution-branded wallet.

John Ginovsky

John Ginovsky is a contributing editor of Banking Exchange and editor of the publication’s Tech Exchange e-newsletter. For more than two decades he’s written about the commercial banking industry, specializing in its technological side and how it relates to the actual business of banking. In addition to his weekly blogs—"Making Sense of It All"—he contributes fresh, original stories to each Tech Exchange issue based on personal interviews or exclusive contributed pieces. He previously was senior editor for Community Banker magazine (which merged into ABA Banking Journal) and for ABA Banking Journal and was managing editor and staff reporter for ABA’s Bankers News. Email him at [email protected]

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The U.S. has come a long way in its journey to real-time payments, with TCH and Zelle in market and FedNow just around the corner. COVID-19 has accelerated that demand to move to real-time. Yet many financial institutions remain unconvinced of the need to move, with less than 3% of financial institutions signed up today.

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