Is Identification the Killer App for Mobile Wallets? (April 17, 2014)
The thus-far sluggish rate of mobile wallet adoption in the U.S. has been attributed to a range of factors, from security concerns, to lack of widespread merchant acceptance to the familiarity and convenience of traditional plastic payment cards. But according to a new report from TSYS, what might be holding mobile wallets back has less to do with the mobile and more to do with the wallet. Until such products can truly replace a consumer’s physical wallet—and all it contains—they won’t be seen as a viable alternative to the good ol’ leather version.
What’s Missing? Creating a Comprehensive Mobile Wallet Solution, a white paper from TSYS, is based on a survey of 500 U.S consumers, conducted in January 2014. And the findings indicate that what’s missing is identification. Respondents listed their driver’s license as the most important item in their physical wallet, with 73 percent of those surveyed rating their license as an “important” item in their wallet or purse, while 53 percent ranked it as the most important wallet item. Licenses ranked above payment cards and insurance cards, which were considered “important” by 68 percent and 59 percent of respondents, respectively. Meanwhile, only 27 percent listed coupons as “important,” and just 24 percent did so for loyalty cards. “The key driver to making the [mobile] wallet truly functional for consumers would be the integration of their identification,” the report concluded.
For mobile wallet providers, integrating identification would require partnering with government agencies, particularly state DMVs, but also issuers of green cards and voter registration cards. While working with such agencies likely would present complications, the rewards would be well worth the trouble, the report indicated. Seventy-eight percent of respondents said they would be more open to using a mobile wallet that contained all the components of their physical wallet—and 66 percent said they would even consider leaving their physical wallet at home.
