Why Smartphones Won’t Be Replacing Wallets Anytime Soon

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For quite some time, we’ve heard that smartphones will replace wallets. Instead of using cash or plastic, the day will come, likely soon, when consumers will simply wave, tap, or swipe their phones for payment. While there are some technological and organizational hurdles holding back the advent of mobile payments, there’s another, more basic problem that’s likely to slow the rise of the smartphone wallet.

The problem is that the mobile payment is a solution to a problem that most people don’t really view as a problem.

A Boston Globe story reviewing the latest options for payment via smartphone ends with these observations:

“There’s one problem with all of these services: Nobody needs them. Traditional credit cards work fine. And the new apps are another way for businesses to collect more personal data about us, in an effort to sell more stuff. The bank already knows everything I buy; should Google know, too? Something to think about before your next smartphone shopping spree.”

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Similarly, while testifying before the U.S. Senate Committee on Banking, Housing & Urban Affairs, Michael Katz, an economics professor at UC-Berkeley, said, “Today, merchants and consumers already have access to a wide range of payment options, including cash, checks, and various payment cards. These options are easy to use, widely accepted, and trusted.”

That hardly sounds like consumers are clamoring for another option, particularly one that brings with it a host of new concerns about security and privacy.

“Cool technology alone will not be enough” to change how people buy things, said Katz. What’s more, Katz disputed the predictions that near-field communications (NFC), the technology that allows shoppers to pay with smartphones, will completely revolutionize retail payment systems. “I believe the changes associated with NFC and so-called digital wallets will be evolutionary, not revolutionary.”

Adoption of the technology will occur slowly because of the chicken-egg situation in which: 1) brick-and-mortar stores don’t want to pay to upgrade their checkout processes for a system few consumers will use; and 2) few consumers will bother signing up for mobile payment systems because so few retailers accept them.

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Even if consumers could pay for most or everything they buy with a smartphone, the wallet won’t be disappearing anytime soon. “Most of us are going to have to carry conventional wallets anyway, at least until drivers’ licenses and insurance cards and the like also go digital,” said Katz. And if you’re already carrying a wallet, how hard is it to carry a few credit cards and some cash inside?

Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.