Mobile wallets are clearly the wave of the future. Yet there's a major obstacle standing in the way.
Digital payments grew to about $721 billion in 2017, according to Experian. But because of the long-standing reliance on credit cards, mobile payment methods like Apple Pay and Google Pay are being adopted at a slower rate in the U.S.
Spending by American consumers just cracked $1,000, on average, for the first time last year according to eMarketer research.
Naturally, phone-friendly millennials are paving the way with peer-to-peer payment apps like Zelle and Paypal's Venmo, which let users store their banking information on their smartphone so they can make electronic purchases.
More than 1 in 10 millennials use their digital wallet for every purchase, Experian said (especially food, rent and Uber rides). It's everyone else that's dragging their feet.
A survey by Experian found that 55 percent of all consumers are sticking with traditional credit cards because of safety concerns.
Although 25 percent of consumers have used a mobile app on their phone to make a payment — a number that will continue to grow — only 12 percent of consumers trust alternative payment providers to protect their payments, according to a separate survey from the American Bankers Association.
Those worries are overblown, according to Michael Bruemmer, Experian's vice president of consumer protection.
"The technology gets better and better every day," he said. "It's not the technology that's the problem," he added, "it's the people that are not using the technology properly."
In fact, digital wallets use authentication, monitoring and data encryption to secure your personal information. And, banking on mobile devices is even considered more secure than online banking, because of mobile operating systems' "sandboxing architecture" which isolates individual apps from malicious malware, according to Jason Soroko, manager of security technologies at Entrust Datacard, a financial transaction security firm.
"Be vigilant and you shouldn't be scared," said Experian's Bruemmer. He recommends these additional steps to shore up your financial information:
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