Chart of the Week: Digital Wallets
This chart comes courtesy of Wall Street Journal (sub. required):
- In your own words, what's a digital wallet? Here's a description from Investopedia.
- Which companies listed in the chart are you familiar with? Would you trust them to store your debit/credit card information?
- Digital wallets now comprise about 1% of U.S. card transactions. What do you think that percentage will be in five years?
- What do you think is the appeal of a digital wallet to consumers? to card companies?
For those new to digital wallets, here's some background from the WSJ story:
U.S. consumers have been slow to adopt digital wallets, which were responsible for less than 1% of all U.S. card transactions last year, according to the Nilson Report. Amazon is looking to Asia, where digital wallets and mobile-payment apps like Alipay and WeChat Pay are commonly used. Amazon executives want to gobble up the U.S. market while the competition remains fairly minimal, according to people familiar with their thinking...Consumers typically upload their debit or credit card account to a digital wallet, and click the wallet tab on a merchant’s website to make an online payment. With wallets capable of in-store payments, consumers hold a phone above a contactless checkout terminal to transmit the card information. Merchants that accept wallets generally don’t pay additional fees beyond what they pay for card payments.
This NGPF lesson on Online and Mobile Banking includes a resource on digital wallets.
About the Author
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.
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