U.S. consumers' interest in mobile wallets has ebbed and flowed for the past seven years, dating back to May 2011 when the original Google Wallet debuted.
Consumers during that span have been faced with a growing list of mobile wallets from the third-party providers, various financial institutions, and even retailers such as Starbucks and Target, which have proprietary systems exclusive to their stores.
But more options in the U.S. haven't necessarily led to increased mobile wallet use the past seven years. While in-app mobile payments continue to soar thanks to the likes of Amazon, the aforementioned Starbucks and Uber, to name a few, the Pays still struggle to find consistent use from consumers.
That might finally be about to change, at least according to a recent consumer survey from TSYS.
"With this study, it's really the first time we've seen meaningful numbers of consumers saying they plan to use digital wallets within the next year or two," Gavin Rosenberg, senior director of product marketing at TSYS, told Mobile Payments Today in an interview about the company's seventh annual Consumer Payments Study.
The study, which TSYS conducted last year and polled 1,200 consumers about various payments preferences, found that "68 percent of respondents who have already loaded a payment card into a mobile wallet or are definitely or likely to do so, indicated that within two years they will make 50 percent or more of their in-store purchases using a digital wallet."
Of course, there is a difference between intent and actual use, and Rosenberg believes the mobile wallet's user experience will ultimately help determine whether increased adoption will be of the hockey stick-growth variety, or a slow, steady rise in the next couple of years.
"If you can remove that friction from the experience and make something easy for people, they will adopt it," Rosenberg said.
Not surprisingly, younger consumers are expected to help drive that mobile wallet growth in the future, according to the study.
While the study did not break it down to an exact percentage, TSYS found that in general, consumers between the ages of 25-34 are mostly likely to be interested in or already using an assortment of mobile features in banking apps and mobile wallets.
Of those features, person-to-person payments has benefited the most from younger consumers.
Forty-five percent of consumers between the ages of 25-34 have used P2P payments. There wasn't too much of a drop with the next age group, 35-44, which checked in at 37 percent.
Even 12 percent of consumers over the age of 65 have used P2P payments.
Venmo and Square Cash certainly have the millennial demographic covered for P2P payments. But older consumers might have been swayed to use Zelle thanks to the heavy marketing push from the big banks involved in that system.
"[There are] two [reasons] why we've seen [P2P payments] have large interest from consumers," Rosenberg said. "The experiences that have been delivered through some of the innovative solution providers [like Venmo and Square Cash] have driven use among tech adopters.
"And now we're seeing the banks have embraced it and pushed it out to to their customers. There's this underlying belief that if the solution is coming from their bank, the diligence has been done and that [Zelle] is secure."
However, security, or perceived lack thereof, is still the top reason why consumers, particularly older ones, shy away from banking apps, mobile wallets and emerging technologies such as voice assistants.
For example, consumers aged 55 and older have the greatest concern about the security of P2P payments at 45 percent compared to 29 percent of the 18-24 age group.
Overall, TSYS concluded the survey findings suggest security may impact the pace at which consumers adopt emerging payment technologies.
Consumers now also appear more uncomfortable using "reliable" payment methods such as credit and debit, most likely due to high-level data breaches.
One surprising result, compared to 2016, is that consumers believe cash is the safest option for in-store purchases over credit and debit. Some 36 percent of respondents believed that to be the case, up from 32 percent last year.
Consumers in 2016 viewed credit cards as the most secure in-store payment method as 35 percent of respondents chose that option. That figure dropped to 29 percent this year.
Debit cards were deemed safe by 25 percent of respondents in 2017, up from 18 percent in 2016.
Rosenberg believes the industry has done what it can to soothe security concerns with emerging technologies with developments such as biometric authentication, encryption and tokenization. But he also acknowledged that data breaches will continue to affect how consumers might pay for things in the future regardless of how easy it might be.
"Until breaches stop happening, I don't think people are going to stop being concerned about data security," he said.
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