Many retailers are excited to adopt mobile wallets, but there are certain questions they need to answer before they can implement this technology properly. As is the case with any emerging payment method, there are some challenges to overcome.

Low consumer uptake

One of the most immediate problems for mobile wallets is their low popularity. Various statistics indicate that between 12% and 18% of mobile users have paid for a transaction using a mobile payment. Most consumers in the U.S. are still using magnetic stripe credit and debit cards.

Some industry experts suggest that when the EMV fraud liability shift occurs in October of 2015, consumers may be spurred to adopt mobile payments as an alternative to EMV smart chip cards. The experts suspect that U.S. customers may move toward the utility of mobile wallets as support for the EMV standard grows.

Consumer concern about mobile wallet security

One of the biggest barriers responsible for low uptake is the concern that many consumers have about the security of digital wallets. Recent events such as the Target data breach have left customers wary of information exposure; many have started to become more cautious about trying new technology or providing personal information.

Payment companies (and retailers who have their own mobile wallet apps) need to convince customers that both the apps and the customers’ data are secure.

Low merchant support

Low consumer uptake and low merchant support have a roughly cyclical relationship. Some merchants are resisting the upgrade to EMV standards and contactless payments. As a result, consumers realize that mobile wallets are incompatible with many retailers, so they stick with cards. Retailers justify not switching to EMV by citing the large number of consumers still using plastic.

Many experts think that if merchant support for contactless payment increases, the industry will see a corresponding increase in mobile wallet usage.

The need for a compelling reason to switch

In order for many consumers to switch from credit cards (which are their traditionally preferred method of payment) to mobile payments, mobile wallets need to demonstrate additional value. Consumers may be more inclined to adopt mobile wallets if they understand that much of the value of mobile wallets comes from integrated features such as loyalty programs and online shopping carts.