The question of digital wallet acceptance is a tired one – but for many merchants a decision they might want to reconsider.  Stored credentials, defined as a system or service that stores multiple payment methods for use across multiple websites, is not a new concept.  In fact, many would say it’s not even a hot topic in payments anymore.  The technology has been around for several years and while the number of players in the space initially experienced explosive growth, Javelin Research expects a contraction in the number of providers between 2019 and 2021.  To add to this morbid state of things, consumer usage of mobile and digital wallets has barely grown since ApplePay exploded onto the scene with much fanfare but little bite in October 2014.

Why Care About Digital Wallets Now?

Despite the slow adoption of digital wallets, merchants should still be paying VERY close attention.  Just follow the money – there is a reason that the major players continue to invest in these technologies.  Just last month Google announced a rebranding of AndroidPay into the broader set of offerings now labeled as GooglePay.  Amazon, Apple and PayPal/Venmo also continue their focus in this space.

Despite these investments, the simple fact is consumers and merchants will ultimately decide the fate of digital wallets.  But the current state between merchants and consumers is stuck in a chicken-and-egg scenario.  The ROI for merchants wanting to accept new wallets is dependent on that mobile wallet provider having critical mass to justify it.  Consumers will generally only take the time to register a new wallet provider if the wallet accepted at the merchants they transact with regularly.  Many consumers are sitting on the sideline, whether consciously or not, waiting to see how this plays out.  Today’s digital wallets and payment methods simply do not provide enough incentive or incremental convenience to meaningfully overcome traditional plastic methods.

What is a Merchant to Do?

Unfortunately, there isn’t yet a one size fits all answer in the merchant space.  Merchants with payment scale can certainly make an easier case for the investment necessary to add newer payment methods in their arsenal of consumer choice.  Smaller businesses may be relying on Payment Service Providers (PSPs) with non-integrated solutions.  Through aggregation, PSPs achieve the scale to justify investments and offer these choices to their merchant base.  This leaves a major chasm in the bell curve representing the merchant majority.  Except for perhaps the most prolific providers already mentioned, meager project net present values are going to make it difficult to convince the CFO to move forward.

Where are Digital Wallets Going?

The good news here is that market consolidation is already progressing, and the landscape of choices will shrink.  Through a combination of consumer choice, player acquisitions, and merchant adoption, we will see the logical choices emerge.  Consumers, especially the younger groups, appreciate the convenience and added security of using integrated digital wallets compared to swipe, dip, or keyed entry.  For most merchants this means a waiting game.  However, do not simply wait – pay close attention to adoption and usage metrics and begin plotting a course.  Once a path becomes clearer for your business, execute that strategic plan so that you’re ahead of the competition, with the peace of mind knowing that you haven’t invested in losing solutions.


Question or Comments?  Contact Nick Fredrick at



Forecasting the Future of Digital Wallets
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