Though there are currently a number of concerns that may restrict consumers’ ability or desire to use mobile wallet technologies to make payments in their everyday lives, many experts now predict those will be cleared within the next few years.
In fact, nearly two-thirds of experts recently noted that they think mobile wallet technology will become so popular by 2020 that it will have almost entirely replaced the use of cash and traditional credit cards in making everyday purchases, according to a new poll from the Pew Internet and American Life Project. And further, they believe that the new type of technology will have replaced cash and credit cards, but also caused them to largely disappear from many transactions in advanced countries.
[Free Resource: Check your credit for free before applying for a credit card]
Experts say this is likely because for consumers, the leap won’t be as large as it might seem, the report said.
“We have already witnessed the transition from cash to debit [and] credit cards,” Microsoft distinguished engineer Christian Huitema told Pew. “The electronic wallet is not much more than a ‘virtual card,’ in which near-field wireless communication replaces the reading of a magnetic stripe.”
However, another 33 percent told Pew that they think the current top concern facing widespread adoption of the technology will linger for some time, keeping mobile wallet transactions firmly in the minority of everyday payments, the report said. A number of recent polls have found that consumers are generally wary of adopting near-field technology payments because they are worried about the security of those transactions as compared with cash and traditional credit use. Some also wonder whether consumers will be especially comfortable with letting technology companies gain more insight into their purchasing habits.
However, many experts have noted that mobile wallet transactions are likely to be far more secure than traditional credit card use because of the way in which the payment data stored on devices will be stored and encrypted, the report said. The technology protecting payment data on a traditional card has been around since the 1950s and can be fairly easy to compromise.
[Credit Cards: Research and compare credit cards at Credit.com]
Currently, the largest hurdle to widespread adoption of mobile payments is simply that too few smartphones contain the necessary NFC technology to complete these transactions. Once more devices come with the right equipment, widespread adoption could come quickly.
Image: Retinafunk, via Flickr