Experts: Mobile Wallets Will Become the Payment Method of Choice by 2020

NATIONAL REPORT -- Payments by cash and credit cards could soon go the way of the dinosaur, according to a study conducted by the Pew Internet & American Life Project.

Nearly two-thirds of the 1,021 respondents -- comprising Internet users -- said they will have fully adopted mobile wallets to make payments at retail locations by 2020.

Mobile wallets provide a way for consumers to make goods purchases in locations such as convenience stores using their smartphones via applications (apps). Google was the first to enter the fray with its Google Wallet payment service. Isis, a joint venture between Verizon Wireless, AT&T Inc. and T-Mobile USA is another expected to come to market soon. In addition, PayPal already provides a mobile wallet in Home Depot stores and is expected to expand that service to other retail outlets.

Asked to further expand on mobile wallet use, 65 percent of respondents in the study conducted by Elon University's Imagining the Internet Center said they agreed with the following statement: "By 2020, most people will have embraced and fully adopted the use of smart-device swiping for purchases they make, nearly eliminating the need for cash or credit cards. People will come to trust and rely on personal hardware and software for handling monetary transactions over the Internet and in stores. Cash and credit cards will have mostly disappeared from many of the transactions that occur in advanced countries."

However, the other 35 percent disagreed with the statement, primarily citing security concerns, reported CNN. "The use of a simple string of digits that must be shared with any vendor with whom you transact is really a ludicrously insecure system that can and must change," said Peter J. McCann, one respondent, the news outlet reported.

However, Mung-Ki Woo, head of the mobile department for MasterCard Worldwide, told the news source last year that mobile wallet technology is very similar to what's used for credit cards.

"It's not better or worse," Woo said.