A recent 451 Alliance study shows digital wallet adoption continuing at a steady pace. However, concerns about security and a perceived lack of convincing use cases persist as barriers to wider adoption.


Current Digital Wallet Usage


Digital Wallets have been gaining momentum over the last few years. Currently, 33% of respondents say they used a digital wallet online or in-store over the last 90 days – 15% of which (or almost half this group) used them weekly or more frequently.

There are two types of digital wallets, open loop and closed loop. Open loop wallets can be used at different merchants while closed loop wallets are generally restricted to a specific merchant.

Apple Pay (50%) and PayPal (45%) are the most used open loop digital wallets, and the top used overall. Both have built loyal followings – Apple because of easy integration with iPhones and PayPal from being one of the first leaders in online payments.

Among closed loop wallets, Starbucks (19%) holds a commanding lead. In fact, its the third most used wallet overall. Their strong following is based on a value proposition for customers consisting of integrated payments and loyalty rewards that goes beyond what an open loop wallet can currently offer.

Top Digital Wallets Used in Last 90 Days

The next closest wallet is Google Pay (8%), which is well behind the leaders. One reason for Google’s low adoption likely has to do with its low satisfaction rating.




Time and time again we see that to be a successful consumer technology companies have to provide satisfactory user experiences to gain and maintain market share. Apple customers are routinely the most satisfied and they continue that trend with Apple Pay (72% very satisfied), which has the highest satisfaction rating among all digital wallet services.

Likewise, Starbucks (69%) has the second highest satisfaction rating overall and is the top-rated closed loop wallet.

Customer Satisfaction

As noted above, Google (56%) has the lowest satisfaction rating among the top five digital wallets in use. With their position as a leader in consumer-facing software, the low satisfaction with their payment app is a clear example of the need for even the most recognizable companies to deliver an experience that is unique and user-friendly.


Digital wallet use cases


Unsurprisingly, digital wallet purchases were made most often at restaurants/coffee shops (43%). Online retailers (41%) and grocery stores (32%) were the other top types of purchases. Respondents prefer to use digital wallets over “tap to pay” contactless cards. Interestingly, three quarters (75%) of respondents have a credit card linked to their digital wallets.


Planned Digital Wallet Usage


Similar to current adoption rates, 34% of respondents are very/somewhat likely to use digital wallets to make purchases over the next 90 days. This highlights the huge untapped market for these types of services.

But new – and even current – entrants in this space must be aware of the crowded and fractured nature of the digital wallets landscape. From open loop to closed loop, payment apps to loyalty apps, and every combination in between, consumers are faced with a dizzying array of options.

At the same time, more that half (54%) of respondents say they prefer to use a single app that is accepted at every store/website where they shop. This creates another hurdle, especially for closed loop and loyalty program apps to overcome. They will need to present consumers with adequate value propositions that make it worthwhile for them to utilize multiple digital wallet apps. Currently, only 2% of respondents prefer to use separate apps for each store/website.


Important Factors


This all plays into two of the three most important factors in using digital wallets: overall ease of use (56%) and widespread acceptance among merchants (43%).

Understandably, the second most important factor is secure storage of financial information (53%) because as we will see security remains one of the biggest hinderances to greater adoption.

Important factors for digital wallet adoption

Encouraging Digital Wallet Use


As noted above, security against fraud (66%) is by far the top feature that would encourage greater use of digital wallets. Additionally, receive discounted offers (24%), faster checkout (22%) and points added automatically to my store/loyalty card (14%) are all areas that would spur greater overall use, but would also give closed loop and loyalty apps unique competitive advantages over larger players in this space.

Encouraging Greater Use

Reasons for Not Using Digital Wallets


In a related question, we asked respondents the most important reasons for not planning to use digital wallets. While security concerns (29%) ranked very high, the top reason is no need/not interested (36%). Combine that with the 18% of respondents who cited prefer traditional methods of payment, and we again see evidence of an untapped market for digital wallet providers to dig into.


Perceptions of Security


When asking respondents directly about their perceptions of digital wallet security, we see some interesting results. On the question of how secure they believe mobile payments to be, more than three quarters of respondents rated them very (38%) or somewhat (39%) secure. Only 22% said they felt mobile payments were insecure.

Yet despite these very strong security ratings, we’ve repeatedly seen security among the top reasons preventing consumers from using digital wallets and mobile payments in general. Furthermore, when we asked respondents to compare them to traditional credit cards, only 8% felt digital wallets were significantly more secure. Interestingly, almost one-third (32%) of respondents were unsure which was more secure.

Digital wallets vs traditional credit cards

This appears to be an issue of consumer education. It is incumbent on digital wallet providers to make the case for their services.

To teach current and potential users of not just the benefits these services offer, but also make them more comfortable with using the new technologies and help users develop new habits that include usage of these services.

With that said, digital wallet providers also have to make sure their offerings properly address issues raised by consumers, including security concerns, providing desired features, improving ease of use and introducing more dynamic use cases.