90% of Consumers Are Familiar With Digital Wallets, but Struggle to Define Them

As digital wallets become a staple of modern consumer life, there’s a need for clarity around their functions. While many consumers are familiar with the technology, confusion persists regarding what exactly constitutes a “digital wallet.”

A PYMNTS Intelligence Report, “Digital Wallets Beyond Financial Transactions: How Do Consumers Think About Digital Wallets?,” in collaboration with Google Wallet, explores consumer awareness, use and perceptions of digital wallets across multiple countries.

Widespread Familiarity

Digital wallets have become nearly ubiquitous in several major global markets. According to the report, nearly 9 in 10 consumers across five countries — Brazil, France, Germany, the U.K., and the U.S. — are familiar with digital wallets.

In Brazil, the familiarity rate is exceptionally high, with just 7.6% of consumers reporting that they do not know what digital wallets are. This is lower than other countries, including France (25.6%) and Germany (19.4%).

Despite the high awareness, many consumers struggle to distinguish digital wallets from other digital platforms. For instance, while consumers across all markets are generally familiar with top digital wallets like Google Wallet, Apple Wallet, and Samsung Wallet, only about 1 in 10 could accurately identify these wallets as distinct from other apps, such as digital banking platforms.

More Than Just Payments

In Brazil, digital wallets are used for more than just financial transactions. They serve a variety of functions, including storing digital IDs, transportation passes, event tickets, and even hotel or car keys. This multifaceted utility is gaining traction among consumers, particularly in markets where consumers already carry their wallets digitally, on smartphones.

This wider use of digital wallets illustrates a change in consumer behavior. For example, the report revealed 16% of consumers had used a digitally stored screenshot as identification — something not typically recognized as a proper digital wallet credential. This points to a gap in consumer knowledge and use, suggesting that more needs to be done to educate users about the full capabilities of digital wallets, beyond just making payments.

Generational Differences

When it comes to generational differences, younger consumers — particularly Gen Z and millennials — are the most likely to use digital wallets. These groups, however, are also the least likely to correctly identify digital wallets compared to other types of apps. The report found that only 6.5% of Gen Z consumers could accurately distinguish digital wallets from other platforms, even though they are heavy users of the technology.

Consumers in markets like the U.S. and the U.K. showed a stronger ability to correctly identify digital wallets, with 14.1% of U.S. consumers and 15.6% of U.K. consumers getting it right. In contrast, Brazil, where use is high, had the lowest correct identification rate, with only 3.1% of consumers correctly identifying platforms like Google Wallet and Apple Wallet as digital wallets.

Many consumers confuse digital wallets with other apps, such as banking, insurance and utility apps, with more than half mistakenly identifying their bank’s mobile app as a digital wallet. This reveals an opportunity for digital wallet providers to better differentiate their products. As digital wallets gain global popularity, clearer education and messaging are necessary to improve consumer understanding and drive wider adoption.

The post 90% of Consumers Are Familiar With Digital Wallets, but Struggle to Define Them appeared first on PYMNTS.com.