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NEW YORK (MainStreet) —Big players across the tech and financial services industries are trying to perfect digital wallets, apps that let you shop with your smartphone instead of cash or credit cards. But a key challenge is convincing consumers that the technology is safe. Who is going to link his or her bank and credit card accounts to a single app when another growth industry for smartphones is malware? Mobile security company Lookout has predicted 18 million smartphones might encounter malware or spyware this year.

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Still, if companies can convince consumers that digital wallets are secure, that could open up a new world of smartphone use including apps that open your car, apartment and office. "Transactions for money and keys for opening doors are, in the philosophical meaning, values," said Ahmad-Reza Sadeghi, developer of a German key app called Key2Share. "Money is a value, and keys give you access to value."

The risks of apps that trade in each domain also turn out to have much in common.

A 2012 survey by Forrester Research, which advises companies on technological changes, found that just 2% of U.S. consumers had ever used smartphones to make in-store purchases.

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Along with complaints that digital wallets at their current state of development are confusing, people are worried about hacking and the risk of losing a smartphone loaded with sensitive financial data.

Harlan Hutson, president of Acuity Systems in the San Francisco Bay area, played down that last concern, saying, "Stolen and lost phones accounted for 0% of cyber crime committed on mobile phones."

But, he said, as more people use their phones to make purchases, there will be reason for cyber criminals to try and do attacks on mobile devices.

Acuity Systems is developing an authentication platform designed to obviate that risk. Their idea is to tie digital wallets not only to a password, but also to an "identity token" based on the owner's unique smartphone habits. Absent that token, a digital wallet authenticated by Acuity's technology won't work.

Sadeghi, a researcher at the Fraunhofer Institute for Secure Information Technology in Darmstadt, Germany, is dealing with similar issues. His team is working on a variety of ways to make Key2Share - which opens smart doors via QR codes and other means - secure (card-activated hotel room doors are examples of smart doors).

Those methods include using built-in hardware like Android's near field communication (NFC) chip or strengthening a smartphone's existing operating system.

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"Of course, the concept is very generic," Sadeghi said of Key2Share, which is still in development. "We didn't go for payment, because that is already run by companies like Google."

If the main security issues are worked out, smartphones could become even more integrated into consumers' daily lives. Some users might completely swap cards and cash for digital wallets, while virtual keys would replace the physical kind.

But Denée Carrington, a mobile commerce expert for Forrester Research, said that along with making consumers feel safe about digital wallets, firms also have to provide incentives for using the tech. "There need to be some benefits to using alternative payments," she said. That financial incentive with the one-stop-shop convenience of keys, wallet and phone all in one integrated spot, may be the secret to great mobile wallet adoption.

Also see: Digital Wallets Suffer Lack of Collective Spirit