Why digital wallets failed to disrupt how we pay despite Covid-19?

Why do you think they would be a disruptive progress over the current state? I.e. I'm not sure what a "digital wallet" would have improved for me in the past year-and-a-half, but I might very well be missing something.

Likely because a credit card has a much better UX. This isn't purely technical, because it is credit vs debit. There are also payment apps from both Apple and Google, why do I need anything else?

It's also worth considering people went out less and didn't use payment terminals as much as they shipped online.

Because we just paid with credit cards. There is no disruption when you already have a replacement technology.

Simple answer: they're annoying. Much prefer the debit card and apple pay.