Customer Satisfaction with Digital Wallets Continues to Grow as Usage Skyrockets
Banking and Payments Intelligence Report
March 2024
Digital wallets are now the fastest-growing payment method in the United States, with almost half (48%) of U.S. consumers indicating that they have used a digital wallet in the past 90 days, up 12 percentage points from 2023, according to JD Power data. What’s driving this surge in adoption and how will it all play out for the major players in the space?
This Banking and Payments Intelligence Report dives into the findings of the JD Power 2024 Digital Wallet Satisfaction Study to spotlight emerging trends and important shifts in consumer sentiment with digital wallet brands.
Satisfaction Increasing with Frequency of Use
Remember when cash was king? Now, convenience is the top driver of payment method choice and that’s causing consumers to increasingly turn to digital wallets for all types of transactions. Overall customer satisfaction with digital wallets is up 4 points (from 660 to 664, on a 1,000-point scale), according to the JD Power 2024 Digital Wallet Satisfaction Study, and the top factor driving that increase is ease of use, both online and in-person.
As a result, consumers are using digital wallets more frequently than ever. Overall, 48% of consumers have used a digital wallet in the past 90 days. Among those, 40% have used PayPal; 28% have used Apple Pay; 22% have used Venmo; and 19% have used Cash App Pay. Among more frequent users who access their digital wallets at least once a month, Venmo and Cash App Pay are seeing the highest overall customer volume. However, within the subset of digital wallet power users, who are using these services at least five times per month, Apple Pay is the most frequently used service.
A Market Ripe for Competition
While digital wallet usage rates and satisfaction scores are both going in the right direction, the industry is far from mature and gaps exist for new entrants. Chief among these gaps is inconsistent merchant acceptance. As we saw in the JD Power 2024 Merchant Services Satisfaction Study, only 57% of small businesses now accept digital wallets (94% accept cards) and some large merchants are still not wallet enabled in-store. Some wallets can only be used for online purchases while others can only be used in-store. And, no wallets are universally available at accepting merchants the same way that cards are.
The lack of perks associated with digital wallet providers, such as rewards programs or merchant discounts, is also a problem. Among the most important drivers of customer satisfaction with digital wallet providers, such as ease of use and security of account information, scores are lowest for perks. These gaps mean that customer loyalty is hard to secure in this space, with just 34% of customers indicating that they “definitely will not” switch brands.
Watch This Space
In the near-term, we expect digital wallet usage to continue to grow rapidly, outpacing other methods of payment at the point of sale, by virtue of its ease of use and its privileged position in the center of consumer lives in smartphones and online. It is noteworthy, for example, that the percentage of people who say they prefer to use digital wallets for online and mobile purchases rises 5 percentage points and 6 percentage points (from 12% to 17% and 22% to 28%, respectively) in 2024. As online and mobile continue to be the channels of choice for so many consumer transactions, digital wallets are certain to benefit from that volume.
Merchant acceptance will continue to grow. Seventy-nine percent (79%) of small businesses have a favorable impression of digital wallets, calling out fast transaction speed and customer demand as the primary attributes of the payment method, and traditional large merchant holdouts continue to convert as demand increases.
Find out More
This Banking and Payments Intelligence Report is based on responses from the JD Power 2024 Digital Wallet Satisfaction Study, which included 3,957 responses and was fielded from September-November of 2023. It is authored by Miles Tullo, Managing Director of Financial Services. Please contact us at the numbers below to connect with Mr. Tullo or to learn more about the underlying research.
Media Contacts
Brian Jaklitsch; East Coast; 631-584-2200; [email protected]
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
