If More States Allow Digital IDs, More Mobile Payments Could Follow

A nascent movement among states to allow citizens to store a driver’s license or other state ID card in a mobile app could give mobile payments a lift, according to research released early Wednesday.

Arizona in March was the first state to allow its citizens the option of storing a license or other state ID card in their Apple Wallet, according to Apple Inc. That move was followed by a similar action in Maryland. These actions, if followed by other states, are likely to lead to higher usage of mobile payments as more and more app users leave their leather wallets at home, projects the consulting firm Auriemma Group. The firm’s latest Mobile Pay Tracker, indeed, indicates “ID provisioning could increase mobile payment usage notably,” according to a release the firm issued Wednesday.

The ground could already be well-tilled for increased mobile-payment usage following the inclusion of digital state IDs, according to the firm. Auriemma’s research found that two-thirds of mobile-pay users and one-fifth of non-users overall have an interest in adding a driver’s license or other state ID to their mobile wallet. Nearly half of these respondents would use the mobile-pay feature more often if their ID card was available in the app. “This is particularly striking among non-users, 45% of whom would begin using mobile payments as a result,” says Auriemma’s release.

Mobile-payment apps from major tech firms like Apple, Google, and Samsung were launched more than eight years ago but have struggled to achieve the high usage numbers many originally projected for the technology. The apps typically allow users to store one or more payment cards in the app to be scanned at store checkouts. Apple and Google have enabled their wallets to store digital versions of ID cards, while Samsung said this summer that capability would arrive later this year as part of a revamp of its Samsung Pay app.

“With the addition of IDs, mobile wallets take one step closer to being a physical-wallet substitute,” Jaclyn Holmes, director of research at Auriemma Group, in a statement. “Though we don’t anticipate mobile wallets to fully replace physical ones, this addition will make leaving home without one a greater possibility should your state provide the option.”

The idea, she tells Digital Transactions News, is that the imprimatur of the state carries a lot of weight with citizens who may then trust the mobile wallet as a means to store and use payment cards. “It gives them a use case to at least try it,” she says, adding that “I was surprised it was about half” who said they’d start using a digital payment card more often if they could add a digital driver’s license or digital ID.

Still, persons who express no interest in adding a digital ID may be pretty well set in their ways. Some 62% of these persons said they don’t like the notion of having so much personal information stored in one device, while half question its security, according to the research. Indeed, more than half distrust the ability of mobile wallets to reliably store their credentials, insisting on carrying the cards with them.

The research, conducted in July, involved online surveys in the United States of 2,182 adults considered “mobile-pay eligible credit card holders.” Auriemma Group conducts the Tracker research three times a year.