In light of the COVID-19 pandemic, technology continues to be a key pillar of our industry as we continue to serve our customers and communities.  Now, more than ever, digital offerings are an important component to a comprehensive payment strategy. 

Traditional financial institutions are also taking note of the sleek apps and intuitive user interfaces offered by big tech companies like Google, Apple and Facebook entering the payments industry and are beefing up their own digital offerings accordingly.

As customers migrate to digital services, mobile wallet usage has been on the rise and financial institutions are shifting their focus as a result. To learn more about the rise of mobile wallets and how community banks can offer their own mobile wallets, PaymentsJournal sat down with Tina Giorgio, president and CEO of ICBA Bancard, and Peter Reville, director of Primary Research Services at Mercator Advisory Group.

PaymentsJournalEnabling Community Banks to Provide Mobile WalletsPaymentsJournal Enabling Community Banks to Provide Mobile WalletsPaymentsJournaljQuery(document).ready(function ($){var settings_ap28454484 = { design_skin: "skin-wave" ,autoplay: "off",disable_volume:"default" ,loop:"off" ,cue: "on" ,embedded: "off" ,preload_method:"metadata" ,design_animateplaypause:"off" ,skinwave_dynamicwaves:"off" ,skinwave_enableSpectrum:"off" ,skinwave_enableReflect:"on",settings_backup_type:"full",playfrom:"default",soundcloud_apikey:"" ,skinwave_comments_enable:"off",settings_php_handler:window.ajaxurl,skinwave_wave_mode:"canvas",pcm_data_try_to_generate: "on","pcm_notice": "off","notice_no_media": "on",design_color_bg: "111111",design_color_highlight: "ef6b13",skinwave_wave_mode_canvas_waves_number: "3",skinwave_wave_mode_canvas_waves_padding: "1",skinwave_wave_mode_canvas_reflection_size: "0.25",skinwave_comments_playerid:"28454484",php_retriever:"https://www.paymentsjournal.com/wp-content/plugins/dzs-zoomsounds/soundcloudretriever.php" }; try{ dzsap_init(".ap_idx_86639_4",settings_ap28454484); }catch(err){ console.warn("cannot init player", err); } });

After some delay, mobile wallet use is on the rise

When companies first began offering mobile wallets in the early 2010s, pundits heralded the technology as the next big thing. But each year, despite the optimism, mobile wallets never saw widespread, sustained adoption.

Reville, who has worked with mobile wallets since 2011, explained that consumers were slow to adopt the technology for two major reasons. First, consumers did not “see the value in using their phone to pay for things over just taking their card out of their wallet.” Part of this reservation stemmed from the fact that people already trusted their traditional financial products and the institutions that offered them.

Any new financial product is met with some degree of skepticism until it becomes more familiar. “People need to understand the technology, understand what it does, and then develop a trust that their money is safe when they use this technology,” noted Reville.

The other barrier to adoption was that mobile wallets could not be used in the majority of stores. “Despite the move to EMV, where many retailers decided to also enable NFC, there was spotty coverage for mobile payments.” However, despite a slow start, mobile wallet adoption is poised to take off.

“Times are changing,” said Reville, “comfort levels are increasing,