The adoption of digital wallets has been growing around the world. Today in the U.S., digital wallets such as PayPal, Venmo and Square Cash are widely used alongside smartphone-native solutions like Apple Pay and Google Pay.
This growth — and the accompanying consumer preference for mobile bill pay solutions — is captured in the latest edition of our ACI Speedpay Pulse Survey of U.S. consumers’ bill pay habits. In 2023, nearly 40% of consumers report having used a mobile wallet to make any sort of payment, up from 26% in 2019. Nearly half (46%) are interested in paying bills with their mobile wallets, and 36% say they use their mobile wallet to store non-payment items such as digital tickets, boarding passes or loyalty cards, up from 21% in 2019.
The convenience of mobile wallets is often cited as a major reason behind their growing popularity. Indeed, storing payments information on smartphone devices — which most consumers would never be without — is a major advantage (15% of digital wallet users told McKinsey they leave their residence regularly without their “old-school version”).
What is less talked about — but perhaps equally as relevant to billers — is the high level of security that digital wallets offer. Protected by smartphones’ built-in authentication features, mobile wallets also provide strong protection for sensitive payments information. This offers peace of mind to consumers and confidence for billers that payments made with a mobile wallet are genuine and authorized.
Plug gaps in consumer security practices with mobile wallets
Added security matters at a time when fraud, such as identity theft, is a growing problem. A 2022 study from Javelin Strategy & Research found identity fraud to be among the fastest-growing criminal enterprises, with 27 million U.S. consumers affected and losses reaching $28 billion in 2021. Our Pulse data backs this up, recording an uptick in reports of online identity theft from 18% to 20% between 2020 and 2023.
Yet, our survey also reveals that consumers have been slow to embrace best practices when it comes to securing their online credentials. Almost one-third write their passwords down on paper, while 16% use the same or similar passwords across all of their billers. Nearly half change their password less often than once a year or only when prompted.
Mobile wallet bill presentment would go a long way toward taking these security lapses out of the equation, limiting billers’ exposure to the financial and reputational consequences of fraud and identity theft. Our ACI Speedpay Pulse data also appears to show that, if positioned correctly, this would be welcomed by a significant proportion of consumers, especially younger ones.
As Figure 1 shows, large segments of Gen Z and Millennials report that standard smartphone security features such as passcodes, fingerprints and facial recognition authentication would make them feel more secure in utilizing mobile and digital platforms.
Figure 1. Q80: Which types of authentication can companies incorporate to make you feel more secure in utilizing mobile and digital platforms?
A wallet – and a digital engagement engine
By placing live bills and up-to-date account information on dynamic in-wallet passes, just as this Fortune 500 utility company did, billers can forge closer, more productive and more secure customer relationships.
For example, the native in-wallet passes and notifications functionality found in Apple Wallet and Google Wallet (included by default on the world’s two leading smartphone platforms) provides billers with a ready-made digital engagement engine. These features can be leveraged to promote paperless communications, reduce call center volumes, incentivize autopay sign-up, and encourage self-service account management and payment actions. Onboarding these passes is easily initiated via standard enrollment buttons, QR codes or SMS links.
Mobile wallets also offer a path to maximizing existing digital investments. Embedded links can be used to drive adoption of billers’ own apps and websites by enabling customers to continue their journeys in those channels. Those journeys can be continuously optimized using data and insights into links clicked and notification reaction times.
Unrivaled reachability
Additional benefits of mobile wallets include unrivaled reachability for real-time push notifications. As a highly trusted channel, opted-in by default, they are ideal for collections and recoveries, critical account updates and maximizing loyalty program engagement.
Meanwhile, precise segmentation and geo-targeting capabilities also unlock hyper-targeted outreach, without contravening TCPA limits on SMS and email messages for overdue customers.
Tom Donovan is a senior solution consultant who joined ACI Worldwide in early 2019 as part of the Speedpay/Walletron acquisition. Based in Philadelphia, Tom spent the first five years of his career as a Java Developer prior to transitioning to sales engineering, and prior to joining ACI was Walletron’s director of implementation. Outside of work, Tom enjoys playing ice hockey, flying his drone and traveling to attend as many college football games as possible with friends.
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