Despite the critics, mobile wallets are revolutionizing payments

In September 2014, Apple announced its mobile payment offering, Apple Pay. Much like the iPod, iPhone and iPad, this latest Apple innovation met a need that consumers weren't even aware they had: to be able to pay for products without fishing for cash or credit cards. In other words, to utilize a phone as a mobile wallet.

According to ITG research, 60% of new Apple Pay customers used Apple Pay on multiple days between its September launch through November 2014. While critics point out that those adoption rates were low (and remain low) in comparison to the product's prelaunch hype, there is no disputing the fact that the mobile wallet was a revolutionary concept which has led to major changes within the industry.

While these changes haven't taken place overnight, their impact has been substantial and enduring.

Chris Ratcliffe/Bloomberg

As of 2016, mobile wallet technology became accessible across the globe. Chinese customers loaded 3 million cards into Apple Pay within two days of its Feb. 18 launch. In its first day, users spent an average of 101 yuan (approximately US$15.42) on purchases.

Over 50% of those purchases cost less than 10 yuan (or US$1.53), meaning customers were using the mobile wallet for everyday items. That last bit is especially noteworthy because when people use a payment type to buy everyday goods and services, they're much more likely to form a habit of using that payment type for other purchases as well.

China continues to show strong support for mobile wallets, as 76% of metro Chinese consumers are already using mobile wallets (compared with 36% of the urban online U.S. population). Additionally, China’s smartphone payments totaled $1.85 trillion in 2016.

Major retailers and financial institutions have moved fast to keep up with the competition by releasing their own branded versions of the fintech. As of today, Samsung Pay, Chase Pay, Android Pay, Microsoft Wallet, Citi Pay, Walmart Pay and countless others have entered the mobile payment space. The increased availability of the technology serves to further encourage consumer adoption rates. It's also applied even greater pressure on merchants to offer mobile payment options to meet the increased demand.

Despite a slower adoption in the U.S. than some might like, mobile payment technology is slated to undergo continued growth. Business Insider research predicts that in the next three years mobile payment volume will rise in the U.S. from $75 billion in 2016 to $503 billion by 2020.

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