Exploring the Opportunities for

Digital Wallet Technology in the UK

Kristopher Arcand, Community Manager

Anjali Lai, Community Manager August 12, 2014

© 2014 Forrester Research, Inc. Reproduction Prohibited

The future of the digital wallet in the UK

Forrester Research leveraged its UK ConsumerVoices Market Research Online Community and European (UK) Consumer Technographics® Retail Survey to understand consumer sentiment around digital wallet technology and optimal features. Forrester paired these insights with data from the UK Consumer Behavioral Study to examine usage behavior on mobile devices across financial apps — including PayPal, which already carries a digital wallet functionality.

Digital wallet technology has been slow to start in the UK, but consumers are gradually becoming aware of how certain features can improve their shopping experience — and not just at the till. As businesses continue to provide this technology and as retailers become more digital wallet compatible, it’s important to understand how best to meet consumer needs and encourage customers to embrace digital wallet technology as the future of seamless, on-the-go payment.

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SECURITY REMAINS THE BIGGEST BARRIER TO DIGITAL WALLET ADOPTION

Top features consumers are interested in having in a digital wallet:

• Coupons, discounts, and special offers (34%).

• Loyalty program points and rewards (30%).

• Price comparisons for items I want to buy (28%). “I would love for there to be a

percentage off offer for

shopping, with loyalty shopping

points and certain types of

vouchers to use as a regular

shopper.”

“You are carrying around in your pocket a

sophisticated computer worth quite a few

hundred pounds, and with a digital wallet

app, the open sesame to larger

unspecified amounts.”

Convenient digital wallet features are most attractive to UK consumers

Source: Forrester’s ConsumerVoices Market Research Online Community, Q2 2014 (UK); Forrester’s European Technographics® Retail Survey, 2013

From our ConsumerVoices data, consumers

state that they worry about the vulnerability of

their information if their phones were stolen,

as well as vendors leaking information.

And some consumers still have a general fear

of making transactions on their phones.

“I don't even use my mobile for online

banking. It is so easy to hack to mobile

nowadays, what with Wi-Fi, etc.”

“Using these features whilst

shopping would make it a whole lot

easier, as it would not only save

time but money too.”

UK consumers are most likely to want features in a digital wallet that help them

organize their shopping experience — and save money.

Other desirable features extend the use of the phone outside of the store — e.g.,

digital receipts and the ability to look up product information.

© 2014 Forrester Research, Inc. Reproduction Prohibited

UK CONSMERS USING THE PAYPAL APP ARE MORE LIKELY TO MAKE OTHER MOBILE TRANSACTIONS

PayPal is trusted as an early front-runner in digital wallet technology

PAYPAL AND OTHER TOP FINANCIAL INSTITUTIONS ARE MOST TRUSTED TO PROVIDE A DIGITAL WALLET SERVICE

Source: Forrester’s Consumer Technographics® Behavioral Study, November 2013 to April 2014 (UK); Forrester’s ConsumerVoices Market Research Online Community, Q2 2014 (UK); European Technographics Retail Survey, 2013

A bank or credit card issuer 42% A payment card network 37%

A mobile operator 11% A merchant/retailer 8%

PayPal 27% Amazon 15%

Apple 8% Google 6%

Microsoft 4% Facebook 2%

A new entrant 1%

PayPal app users are more likely to be:

35 to 44 years old

Lower income (less than £32,000/year)

Super Buyers

Social Snackers

PayPal app users are more likely to use:

Financial/banking apps

E-tailer apps

Coupon apps

Most trusted digital wallet app providers:

Typ

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rovid

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B

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pa

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“The PayPal inStore app looks like a

good method of payment to me and it

will probably be something that I will

consider using in the future at some

point or another.”

© 2014 Forrester Research, Inc. Reproduction Prohibited

Digital wallet technology will transform the consumer shopping journey

“As the barriers to using digital wallets continue to fall (especially when it comes to

mobile digital wallets) and the prevalence of highly valued benefits continues to rise,

consumer adoption will rise, as well.” — Denée Carrington, senior analyst

Digital wallet strategy should evolve to keep pace with customers’

expectations about payment and commerce experiences.

To motivate consumers to consider digital wallet technology over their

current payment methods, providers will need to deliver significant value

across features and use-cases.

To learn more, see the December 2, 2013, “Understanding Digital Wallet

Options For Your Business” Forrester report.

© 2014 Forrester Research, Inc. Reproduction Prohibited

How we can help you DATA-DRIVEN INSIGHTS THAT PROVIDE A 360-DEGREE VIEW OF THE CONSUMER

Technographics® Survey Data

Who are they? What do they say they do?

Technographics Behavioral Data

What are they doing, and where and when are

they doing it?

Technographics Qualitative Data

Why are they doing it? Why are they saying it?

Technographics Social Listening Data

What are they talking about? How are they

talking about it?

Want to learn more about Forrester’s data offerings? Take a look at Data Services.