Digital payments will only increase
Most consumers continue to look for their physical cards or cash in their wallets at the checkout, despite a plethora of data suggesting a clear trend towards digital alternatives.
This decision will benefit both businesses and consumers. For both, digital wallets offer greater security. They are also more convenient, making transactions easier and faster than before.
According to IDEMIA’s Executive Vice President of the Digital Business Unit, Matthew Cole, we are seeing an evolution that has already taken place with various other types of identifiers. Transportation cards and campus access badges, for example, have already gone digital. And it will eventually happen everywhere.
See also: Migration to digital cards “will take time” given the resistance of plastic
“We are gradually seeing this digitization of all the credentials you find in your wallet,” Cole told PYMNTS in an interview. “And this will continue until you see all of the credentials that are physically in your pocket today, inside a digital wallet. So you no longer need to carry a physical wallet. or even your car keys.
Cole’s prediction of a brave, new, all-digital world is not a daring prediction. Many experts and even many not–experts have made similar predictions over the years. And yet, while the technology to completely replace our physical wallets has arrived, most people still carry one wherever they go. PYMNTS data shows that while 41% of consumers now own some kind of digital card, physical cards are still far more popular.
Read more: Why 75% of Consumers Don’t Use Digital Cards
And they’re going to stay popular for a while, Cole said. He said he believes physical and digital wallets will coexist at least until a majority of stores have the infrastructure in place to support them. And we have a particularly long wait in terms of widespread adoption of digital identities like passports and driver’s licenses.
“The concept makes sense, provided that every time you need to use your license or passport, the physical infrastructure is there to support it,” he said. “In the case of international travel, it’s going to take a long time to come.”
So if we have the technology, what’s stopping us from putting in place the infrastructure that it needs? According to Cole, it’s kind of a chicken or egg problem. He said a combination of factors has forced some retailers and government organizations to put in place the necessary infrastructure to support digital wallets, while others have not.
“Some retailers have adopted the self-checkout infrastructure much faster during the pandemic, but not everyone has,” he said. “So you will need to be able to support all forms of payment for the foreseeable future. “
See also: Connect the physical and digital payment experience
To drive faster adoption, Cole said, digital wallet providers must continue to educate consumers and try to deliver superior experiences.
Cole stressed that it’s important to recognize that it won’t be someone who creates a one-size-fits-all solution. He pointed out that he uses multiple digital cards. He will use his virtual card in his mobile wallet when traveling on public transport, but if he walks into a store, he always pulls out a physical card because he feels good.
“There will be a combination of options that consumers will use, depending on the use case and the transaction they are making,” Cole said.