Will 2015 be the Year of the Digital Wallet?

A variety of factors will influence rapidly increasing adoption of digital wallets.

December 30, 2014

NEW YORK – This year may very well go down as the year of the corporate hack, with numerous breaches occurring in retail, banking, entertainment and government. Some consumers, feeling that their data is not secure in the traditional channels, have begun moving their payments to so-called digital wallets, such as PayPal or Google Wallet, as well as making payments via mobile systems such as ApplePay.

According to columnist Michael Fauscette on the website Seeking Alpha, he thinks mobile payments and in general digital wallets will see a big boost in the coming year. The writer suggests that we're reaching critical mass for mobile payments for several reasons, including:

  • The wide adoption of smart mobile devices (2014 alone saw over 1.3 billion smartphones shipped according to IDC WW smartphone tracker data).
  • More online merchants are simplifying the mobile experience and as a part of it, accept some digital wallet solution, while more offline merchants are accepting digital wallet payments.
  • The security risk of passing detailed financial data to a merchant, on- and offline, is high and in the current environment, where things cannot easily be secured against hacking, people will look for alternate ways to pay.
  • Wearable tech is starting to gain a small foothold, and will likely make the digital wallet even easier in the future.
  • The growth in the use of in-store beacons will start to shape the in-store retail experience by combining location context, identity and loyalty programs to provide personalized in store experiences. The digital wallet will be an integral part of that experience.
  • Marketplace driven businesses like Uber and Airbnb, a key part of the so called sharing economy, all already accept some form of mobile payments. As they grow in popularity they will increase the use of the digital wallet.
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