New research being released today reveals that, among digital wallet users, Apple’s Passbook is used more frequently than PayPal or Google Wallet, pointing to the significant potential a more complete wallet offering from Apple would have.

The Digital Wallet Usage Study from Thrive Analytics found that 79 percent of consumers have used PayPal, 40 percent Google Wallet, 26 percent Groupon and 17 percent Apple’s Passbook. However, Passbook is used more on a weekly basis, with 60 percent saying they use Passbook weekly compared to 49 percent for Google Wallet and 40 percent for PayPal.

“With the number of consumers carrying cash at an all time low and high awareness of digital wallets – 78 percent – it is surprising that adoption rates are still relatively low at 32 percent,” said Jason Peaslee, managing partner at Thrive Analytics, Kettering, OH.

“Given the more frequent use of Apple’s Passbook on a weekly basis, I think if Apple were to extend its capabilities it could become the big player to piece everything together and gain significant market share,” he said.

Mobile drives use
While Passbook is used more often on a weekly basis than other digital wallets, it tends to have smaller transaction values, with 39 percent of transactions less than $10.

Other digital wallets are having a harder time building a user base, with 5 percent having used Pay Pass by MasterCard, 4 percent Dwolla, 4 percent Venmo, 4 percent Isis and 2 percent V.Me from Visa.

The report is based on an online survey conducted in June that received 2,038 responses.

While overall usage of digital wallets is still relatively low at 32 percent, mobile is the leading platform, with 60 percent using digital wallets via a mobile phone or tablet.

The report also underscores how mobile is driving smaller, everyday purchases, with 75 percent of transactions less than $10 being done via a mobile phone on a weekly basis.

In comparison, 70 percent of transactions more than $30 are done via a laptop on a quarterly or longer basis.

Wallet fragmentation
Awareness of digital wallets is high at 78 percent. The main reasons for the low usage rate are security concerns, named by 46 percent, and the perception that it is easier to pay with cash, named by 37 percent.

Digital wallet users are younger, with 43 percent between the ages of 18 and 29. By gender, 57 percent of digital wallet users are male and 43 percent are female.

Additionally, 7 percent use digital wallets daily, 33 percent weekly, 31 percent monthly, 6 percent quarterly and 24 percent a few times a year.

Nine out of ten consumers that use digital wallets have had a positive experience, saying they are easy, simple and convenient to use.

Almost half the consumers using digital wallets spend $20 to $30 per transaction, with the typical products being purchased including coffee and drinks, retail items, games and books as well as groceries.

The numbers underscore the need for mobile marketers and retailers to educate consumers on the benefits and convenience of digital wallets.

At the same time, it highights how no one provider has figured out all of the pieces needed for a successful digital wallet.

“The mobile wallet space is very fragmented and the survey results indicate consumer adoption is still relatively low,” Mr. Peaslee said.

“There are companies that are doing some things well – such as educating their customers on the value of using a digital wallet, optimizing their mobile apps and partnering with businesses to secure the necessary equipment – but nobody has pieced it all together,” he said.

“The ones that truly succeed will have to provide consumers with new sources of value in order to change their current behaviors. For example, a winning digital wallet should provide an enhanced shopping experience with seamless loyalty integration, offer redemption options and include shopping tools. This requires real innovation in solving unaddressed consumer problems.”

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York