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The Mobile Wallet Opportunity for Governments

Thanks to mobile wallets, more people are using their phones to make payments, send money and shop online.

Close up of a man using mobile smart phone
The rise in smartphone usage, estimated at four hours per day during 2020, has unsurprisingly created new uses and opportunities within the payments space. Thanks to mobile wallets, defined simply as any technology that stores payment card information via a native smartphone or third-party app, more people are using their phones to make payments, send money and shop online.

The numbers not only show that more people are using mobile wallets, but they are also using them more frequently. In 2021, one in four smartphone owners report using mobile wallet payment methods, an increase over 2020, with nearly 25 percent using their mobile wallets multiple times per week, while 31 percent report using them a few times per month.

And it’s not just younger consumers driving this demand; all generations appear to be seeking greater mobile options for their payments. This makes sense given that 2020 ACI Speedpay Pulse data showed that 70 percent of bill payers prefer to make one-time bill payments through digital channels such as websites, mobile and smart devices.

So, while on the surface it would seem that mobile wallet usage would be set to take off in the bill pay space, the facts show just the opposite. Data shows that the percentage of citizens who would consider using mobile wallets to pay their bills has leveled off at 36 percent. Why? Here are the four main reasons:

  • Security concerns
  • Comfortableness with other payment options
  • Reliability
  • Unfamiliarity

Unsurprisingly, security ranked as the top barrier to mobile wallet adoption, with 51 percent of citizens listing it as the main reason they do not or will not use mobile wallet payments. And while these barriers do stand, they also provide us with a clear view of what governments must do to increase mobile usage. Here are a few best practices governments should employ as part of a comprehensive strategy.

Promote the Benefits of Mobile Wallets
Citizens want and expect faster, simpler and more seamless payments that fit within their lifestyle. Mobile wallets provide this and more. Showing your citizens the ease and convenience offered by mobile wallets will go a long way in overcoming the hesitancy of adopting a new technology, especially for something as important as paying bills.

Provide Ongoing Education
With the rise of mobile usage, it’s easy to forget that there are many people who don’t take full advantage of all that their smartphones have to offer. Given the relative infancy of mobile wallets, governments must maximize their marketing opportunities, including websites, newsletters and billing statements, to educate citizens.

Be Transparent on Security
To reiterate, 51 percent of citizens avoid mobile wallet usage due to a perceived lack of security. Governments must clearly show how they are safeguarding sensitive data and ensuring mobile wallet payments are as safe as traditional payment methods. Use the education and marketing channels mentioned previously to expand on the safeguards in place, particularly around the biometrics involved in smartphone usage.

The big question is, why is this so important? For citizens, mobile wallet payments are simply their favorite payment method they haven’t yet discovered. They satisfy every citizen demand for speed, simplicity and convenience, with the added bonus of never being far from their pockets. They won’t have to worry about missing a payment and can quickly catch up on the off chance that they do.

For governments, mobile wallet technology is simply a better way to serve citizens — one that goes beyond payments. They allow for governments to collect more on-time payments, drive greater satisfaction and streamline collections to save time and money. But they also make it easier to send notifications and alerts, and can help with driver licenses, permits, fishing and hunting licenses and recreational passes.

The mobile wallet opportunity is officially here and it’s time governments begin benefiting. For more in-depth information and insights on how you can drive mobile adoption, download the latest 2021 ACI Speedpay Pulse Trend Report, Government Edition.

*All data courtesy of the 2021 ACI Speedpay Pulse Trend Report, Government Edition unless otherwise noted.