Strategy Analytics – Contactless payments and digital wallets such as Alipay and WeChat Pay are ubiquitous in China but despite being around for several years, they have been much slower to catch on in the West. The pandemic has made contactless payments more attractive to consumers, but the lack of physical points-of-sale available to use has inhibited growth. Online growth surged during 2020 due to COVID restrictions and while this should have increased consumer interest in digital wallets, contactless payments have still struggled to take hold in the West.
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Contactless Payments (Source: Shutterstock)
A new report from the Strategy Analytics’ UX Strategies (UXS) service, “Driving Adoption of Digital Wallets and Contactless Payments”, surveyed consumers in China, the US, and the UK regarding their usage of contactless payments, their interest in digital wallets, their prioritization of digital wallet features, and the importance of specific incentives when applying for a new credit card. After the pandemic, consumers in the West will be somewhat more likely to adopt contactless payments, but there is still a long way to go before it becomes the preferred payment method across all regions.
Commented Chris Schreiner, report author and Director of Syndicated UX Research, “Everyone in China routinely use contactless payments, even the older generations. Chinese respondents over the age of 55 reported greater use of contactless payments than ANY age group in the US and UK. Comparatively, the use of contactless payments in the US and UK is overwhelmingly confined to respondents of less than 45 years of age. In these regions, older consumers are more likely to say they do not have, or do not know if they have, the capability to make contactless payments on their smartphone.”
Continued Schreiner, “Combining additional features like peer-to-peer payments will result in more early adopters and younger consumer adopting digital wallets, but these are also the same ones who are already expressing the greatest interest.”
Added Kevin Nolan, VP, UX Innovation Practice, “To appeal to older consumers, there are several things that need to occur, including better communication that these options exist, better education to show the benefits of digital wallets and better incentives – over and above what traditional credit cards offer – to spur interest. The entire payment experience needs to be contactless and that includes steps at physical points-of-sale, which in the US should also incorporate tipping and providing signatures.”
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Source: Strategy Analytics, Inc.