Digital wallets could replace physical wallets much sooner than you think.

Last Wednesday, Samsung announced its acquisition of LoopPay, a Boston-based mobile payment company. LoopPay’s technology will be integrated into Samsung’s Galaxy S6 smartphone set to release later this year, according to a Feb. 18 Business Insider article. This move will make Samsung a direct competitor to Apple Pay.

Samsung embracing this technology suggests that the use of digital wallets will gain momentum in 2015. But before it can take off, major tech companies need to focus on making consumers comfortable with adopting this new style of checking out.

“A lot of the focus was really how do we solve a bigger problem, which is consumer adoption,” said LoopPay CEO Will Graylin in a Feb. 19 USA Today interview. “Consumers are not going to adopt if they can’t use a vast majority of their cards at a vast majority of merchants … If you want to get the first 1 percent to use your wallet instead of their old wallet, you better have 80 percent of the merchants accepting that new wallet.”

Samsung’s new mobile wallet option has a clear advantage by being available in many more places than Apple Pay. Unlike Apple Pay, which uses near-field communication, Samsung’s patented technology called Magnetic Secure Transmission works with traditional magnetic credit card readers. This gives Samsung a leg up on the competition due to accessibility.

Apple is known for pioneering, but Samsung may end up being company leading the mobile wallet revolution.

Standard magnetic credit card readers are turned into mobile wallet readers using LoopPay’s technology, giving users access to millions of retail stores, compared to the 220,000 retail stores that have the NFC readers required to use Apple Pay. This move is attractive to not only consumers, but also to retailers interested in expanding their payment options without having to install new equipment.

In order for digital wallets to become widely adopted by the consumers, companies need to clearly show how this whole process works for the not so tech-savvy shopper. They also should accommodate for loyalty and gift cards and avoid security blunders at all costs.

For now, the idea of replacing clunky old-fashioned wallets with digital wallets remains just a cool concept that is still working out the kinks. Using NFC technology to share bank information through a mobile device is still a fairly new idea and deserves extra time to make sure everything works properly. Millennials’ willingness to spend and share money on their smart devices could make this payment approach take off sooner than expected.

Samsung shouldn’t expect Apple to throw in the towel just yet. Apple will continue to increase Apple Pay’s accessibility as the release of its much-anticipated smartwatch draws near. The power of Apple’s brand is undeniable and could warm people up to the idea of paying with devices better than Samsung could.

Regardless of which brand wins the popular vote, combined initiatives by both tech companies could spur a widespread adoption of mobile wallets in 2015.

Walking up to a cashier, scanning your phone, signing off on the purchase and leaving store within minutes is the future of payments. If and when digital wallets become the norm, physical wallets will be added to the long list of items that are now novelties thanks to technology.

Aarick Knighton is a junior information management and technology major. His column appears weekly. He can be reached at adknight@syr.edu and followed on Twitter @aarickurban.

Published on February 25, 2015 at 12:15 am