In recent months, many companies have really ramped up efforts to create and promote mobile wallet digital payment systems as a means of making everyday payments, and now experts believe these efforts will pay off before the end of the decade.
In much the same way that Americans were slow to adopt mobile banking, but many now use it regularly, a good number of experts now believe that mobile wallet technology will replace traditional credit card use and possibly even cash by the year 2020, according to a new study from the Pew Internet & American Life Project. This new type of payment method involves using a smartphone or other mobile device loaded with a technology known as near-field technology, and users load their credit card information onto the handset. To complete a transaction using a mobile wallet, the user would simply have to wave their device over a specialized reader. These programs are currently being developed by a number of companies and many should be ready within the next few years.
As a result, some 65 percent of respondents told Pew that they think mobile wallets will be used more often than credit cards and cash to make day-to-day purchases, the report said. In fact, the language of that question noted that the two current payment methods "will have mostly disappeared from many of the transactions that occur in advanced countries."
"There is nothing more imaginary than a monetary system," Susan Crawford, Harvard professor and formerly a special assistant for technology policy for President Barack Obama, told Pew. "The idea that we solemnly hand around printed slips of paper in exchange for food and water shows just how trusting and fond of patterned behavior we human beings are. So why not take the next step? Of course we'll move to even more abstract representations of value."
Some see consumers as too wary
Though the majority of those polled said that mobile wallet technology would become that popular within the next eight years, those who disagreed cited a popular hurdle that the new payment technology has yet to get past, the report said. Recent polls have found consumers quite nervous about the security of this type of payment technology, and 33 percent of those polled said that this concern would linger, and prevented mobile wallets from gaining significant traction in the marketplace.
Google has already introduced its own program, known simply as Wallet, and Isis, a joint venture between AT&T, T-Mobile and Verizon, will likely become available later this summer. However, the major stumbling block facing these programs right now isn't consumer worries, but rather the simple fact that most smartphones do not yet come loaded with NFC technology. However, experts believe that the next generation of mobile devices will likely come with the necessary equipment embedded. As for the concerns about security, many note that mobile wallets are actually safer to use than traditional credit cards because of how they encrypt payment information.