Industry insights Read time : 3 minutes

Will Contactless Payment Cards Make Mobile Wallets a Thing of the Past?

Contactless Payments and Mobile Wallets


Since Google introduced Google Wallet in 2011, Apple launched its first mobile wallet in 2014, and Samsung and Android followed in 2015, mobile wallets have seen only a sluggish rate of adoption.

Contactless payment technology, which powers mobile wallet transactions, has been somewhat overshadowed in the US by the transition to EMV, which was taking place at the same time that Apple Pay, Samsung Pay, and Android Pay were introduced. Mobile wallet adoption was also paced by the type of smartphone a user carried — Apple Pay, for example, required iPhone 6 or higher at launch, and it took consumers some time to catch up and use a version that supported the mobile wallet.

And obviously, whether merchants accept mobile wallet payments is also a factor in whether consumers can use them. Merchants need a terminal capable of accepting mobile wallet payments — and they need to turn that functionality on.

Who is Using Mobile Wallets?

PYMNTS studied mobile wallet use among consumers and determined the current percentage of adult smartphone users that have used a mobile wallet to pay:

  • Apple Pay: 13 percent
  • Android Pay: 7 percent
  • Samsung Pay 5 percent

Interestingly, the mobile wallet with the highest use is Walmart Pay, which 24 percent of adult smartphone users have made payment with. PYMNTS attributes the higher percentage to the fact that it can be used on any smartphone but points out that it can only be used at Walmart stores, which is less than 10 percent of all US retail sales.

Besides having a smartphone with a mobile wallet app, a study by Merchant Machine reveals that age may also be a factor in whether consumers use mobile wallets. Predictably, the study found younger consumers are more likely to use mobile wallets:

  • Nearly half of survey respondents ages 18-34 have a mobile wallet, and 32 percent are interested in having one.
  • In the 35-44 age bracket, 44 percent have a mobile wallet, and 25 percent are interested in them.
  • Less than 30 percent of people in the 55-64 age group have a mobile wallet, with 27 percent interested in having one.

Contactless Cards Arriving at Scale in 2019

US consumers lukewarm about mobile wallets are about to receive a new option. Card issuers including Chase have announced they will issue contactless payment cards to all cardholders this year. Contactless cards work similarly to mobile wallets: Near-field communication (NFC), a form of RFID technology, enables contactless payments. When a contactless card or smartphone with a mobile wallet is tapped or held within a few centimeters of a contactless payment terminal, it communicates payment data wirelessly.

Contactless cards may have an edge when it comes to user experience, however. There is no app to set up, no phone to unlock at the checkout, no app to find and open — just a simple, frictionless, tap-and-go experience. Analysis of contactless payments in markets around the world, which are far ahead of the US in contactless payment adoption, shows that consumers across the board favor cards, which provide a much easier user experience.

Is There Still Hope for Mobile Wallets?

Consumers who learn how easy tap-and-go payments can be with contactless cards may yet decide there’s value in using a mobile wallet. Mobile wallets may permit the user to store multiple cards as well as loyalty rewards and gift cards, so it can help shoppers quickly find all the data they need. And if the process of using a mobile wallet is streamlined, adoption may increase.

In addition, merchants who have been reluctant to enable contactless payments may do so in response to consumer demand after the rollout of contactless cards this year. US consumers can then have the choice of whether to tap and pay using a card or a smartphone — and although time will tell the method they prefer, the most convenient way to pay is sure to win out.

NMI Team