Shoppers’ acceptance of mobile wallets is firmly established. What began as a convenient way to pay has expanded into a broader trust relationship, as consumers increasingly rely on digital wallets for loyalty programs, offers, and store credentials — and now, their most sensitive credential: their ID.
With a majority of U.S. adults already using platforms like Apple Pay and Google Wallet, digital ID represents the final step toward eliminating physical wallets filled with plastic identification cards, loyalty cards, credit cards, and driver’s licenses.
Alex Campbell, co-founder and chief innovation officer at Vibes, a mobile engagement platform provider Vibes, calls the shift far more than a technology upgrade, describing it as a turning point for mobile engagement.
“If the wallet is where identity lives, loyalty naturally follows without requiring an app download,” he told the E-Commerce Times.
Retailers that embrace a wallet-first loyalty strategy now stand to gain a significant competitive advantage as platform usage accelerates heading into 2026, he predicted.
Apple’s Digital ID Changes Consumer Behavior
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Digital wallet adoption in the U.S. continues to accelerate. The total number of users increased by 57% since 2024, underscoring how quickly wallets have moved from optional convenience to everyday infrastructure.
Apple Pay has been a primary driver of that growth, with analysts reporting more than 65 million active U.S. users in 2025 — nearly half of the mobile wallet market. That scale gives Apple Wallet immediate leverage for its digital ID feature introduced in early November 2025.
Digital ID allows users to securely add U.S. passport information to an iPhone or Apple Watch for in-person verification at TSA checkpoints and other approved locations. The capability builds on Apple’s earlier support for digital driver’s licenses introduced in 2022.
Gen Z and millennials are driving the momentum. More than 73% of Gen Z digital wallet users rely on Apple Pay for weekly payments, signaling habitual engagement that digital ID integration is likely to deepen.
Estimates from Finder.com and Statista place Google Wallet at roughly 200-250 million users worldwide, up from about 150 million in 2022. In the U.S., Google Wallet remains a significant competitor, though adoption still trails Apple Pay.
mDLs Spur More Adopters
Mobile driver’s license (mDL) adoption in the U.S. is accelerating as more states pass laws allowing residents to store digital licenses in Apple Wallet and Google Wallet. By late 2025, an estimated 19 to 30 states had live programs or pilots underway.
This established habit has laid the groundwork for what marketers increasingly view as the next mobile frontier: identity. Apple’s November 2025 launch of expanded digital ID capabilities marks a pivotal step toward reducing reliance on physical wallets for carrying credentials.
About 76% of Americans now live in states that have adopted or are piloting mDL programs, signaling that state-backed digital identity infrastructure is nearing mainstream reach.
By the end of 2025, 15 states plus Puerto Rico fully support adding driver’s licenses or state IDs to Apple Wallet. Google Wallet also supports mDLs and state IDs in select U.S. states and the U.K., though physical IDs are still commonly recommended alongside digital wallet apps.
Smartphone dominance — with roughly 91% ownership compared to 53% passport usage — is helping drive the shift. As wallet functionality expands beyond payments and loyalty cards, digital identity is emerging as a secure, privacy-focused tool for everyday use, not just travel.
Getting Started Poses Challenges
A patchwork of legal, technical, and practical hurdles continues to hamper digital ID onboarding, Campbell cautioned. Varying state laws and acceptance rules mean a credential accepted in one state may be rejected in another.
Campbell explained that inconsistent technical standards and issuer practices complicate interoperability between iOS and Android wallets and verifier systems. Widespread adoption also requires costly upgrades to NFC readers, law enforcement and airport workflows, and staff training.
Privacy and trust concerns around who verifies and stores identity data remain unresolved. Robust security, revocation, and recovery processes are also essential.
“Equitable access must be ensured for those without compatible devices,” he said.
Shopper Security, Convenience Boost for In-Store, Online Sales
According to Campbell, Near Field Communication (NFC)-based tap verification — rather than QR codes — represents the long-term vision for the technology. NFC is more secure and harder to fake, but it requires verifiers such as law enforcement, TSA agents, retailers, and delivery drivers to deploy NFC-capable readers and updated workflows.
“Security is generally stronger on phones thanks to tokenization and device-level biometrics, but privacy and trust issues remain around who performs identity proofing and what data is shared,” he said.
Campbell emphasized that retailers and brands share a common business objective. Combining wallet functionality with messaging can drive in-store traffic, increase offer redemption, and improve loyalty program engagement, while reducing certain fraud vectors.
He sees expanded use of digital wallets as a way to address persistent challenges for brick-and-mortar merchants, bridging the convenience of online shopping and bringing shoppers into stores where additional purchases occur.
With online shopping, merchants and brands miss the opportunity for consumers to enter a store to buy a single item — and end up purchasing three or four additional products. The objective is to draw shoppers into stores where they can browse and discover more.
“So we steer many of our brands toward using wallets to drive that traffic,” he said.
A Win-Win Combination for Better Commerce
According to Campbell, digital wallets and SMS messaging work together effectively as a retail marketing strategy. Merchants can send consumers in their databases coupons, offers, or perks tied to loyalty cards directly through messaging.
“We integrated the wallet into our overall platform. On the messaging side, you can also send messages directly to the wallet. On average, we’ve seen about a 26% increase in redemption when that’s done effectively,” Campbell said.
He noted that while e-commerce commands attention, it still accounts for only a fraction of overall commerce.
“Merchants care about getting their customers engaged in ways that drive repeat visits and incremental purchases,” he said.
