iPhone Wireless Payments Arrive After iCloud Scandal, and We Already Don't Trust NFC

NEW YORK (TheStreet) — People aren't carrying all that much cash these days — only about $20 or so at a given time for half of U.S. adults, according to one study.

But they aren't replacing cash with digital wallets, at least not in great numbers. Instead, debit cards and credit cards seem to be the payment vehicle of choice for most Americans.

The chief obstacle for digital wallets — cashless payments stored on consumers' mobile devices, made via a system called near field communications — is that Americans don't trust them to make large purchases. The above study, from Thrive Analytics, says most digital wallet transactions are for $50 or less.

The most common form of digital payments is for coffee or snacks, Thrive reports, or for things such as groceries and digital apps. 

That distrust of digital wallets by consumers isn't going to dissipate after recent talk about an iCloud data breach said to result in the public release of compromising photos of major Hollywood celebrities. The breach shows the vulnerability of digital applications and points to potential security issues with payment-based digital apps that could lead to identity theft, experts say, an issue facing a major test if Apple's next generation of mobile products does indeed come with the ability to make wireless payments.

According to the June study from Thrive, security concerns are the primary reason financial consumers shy away from digital wallets — 46% of survey respondents say security is the "main barrier to adoption."

Lack of usability is next, particularly when compared with credit cards, cited by 37% of respondents.

When financial consumers do use digital wallets, they're opting for high-profile brand-name technology providers touting high security. That group includes PayPal, Visa's V.me, MasterCard's MasterPass, Google Wallet and payment platforms such as eBay and Amazon that tie payments to either the user's credit or debit card or to a payment provider such as PayPal.

Brand-name retailers such as Starbucks offer payment options from mobile apps (at Starbucks, apps make up about 14% of all in-store payments), and the coffee chain has announced it will broaden its payment services to include more digital wallet options by the end of 2014. CVS and Walgreen have supposedly signed on to support the coming Apple iPhone capabilities.

Sounds great, but if the public sees more security concerns on the level of the supposed iCloud data breach, adoption for mobile wallet payments could slow even further.

On the other hand, it just may have taken the release of a few racy celebrity photos to get the payment industry's attention. Fix the security issue, and you just might earn the trust of technology-savvy Americans.

More from Personal Finance

Best Real Estate Markets for Homeowners in the U.S.

Best Real Estate Markets for Homeowners in the U.S.

How to Be a Winner Like Legendary Former General Electric CEO Jack Welch

How to Be a Winner Like Legendary Former General Electric CEO Jack Welch

Best U.S. Cities for New College Grads

Best U.S. Cities for New College Grads

33 Pictures of the Drastic and Deadly Impacts of Climate Change

33 Pictures of the Drastic and Deadly Impacts of Climate Change

30 Mind-Blowing Concept Cars and Cars of the Future We Want to See Built

30 Mind-Blowing Concept Cars and Cars of the Future We Want to See Built