The mobile wallet is a consumer-facing application for managing payment types. It typically has the ability to access many payment types and fund different account types such as open loop, bank-issued debit, reloadable prepaid debit and credit, as well as private-label, merchant-issued credit, pre-paid or stored value, and decoupled debit. Open loop mobile payment solutions allow users to pay at many different locations from one centralized digital wallet.

Closed loop mobile payment solutions allow consumers to manage merchant gift cards or single payment accounts via mobile devices. Branded mobile payment and loyalty solutions are examples of closed loop mobile payment systems.

There are three sources of mobile wallets that are either being developed or already in use: Financial institutions; intermediaries including Apple, Google, Samsung and PayPal; and retailers that have expanded their mobile apps.

A 2015 Gallup survey said mobile wallets are a low priority for consumers, with only 13% of 17,000 U.S. consumers surveyed having a wallet on their smartphone. A 2016 Cement survey added only the most optimistic 6% of respondents expected more than 20% of in-store transactions to be initiated via mobile device in three years.

Still, payments company Blackhawk Network revealed in a study that mobile wallet adoption is up 8% over last year, and as many might expect, millennials use new payment options such as mobile wallets at a higher rate than the general population.

"The real future value of mobile payment will come from personalized, continuously responsive, in-context services added to the mobile wallet," Richard Crone, CEO/founder of the San Francisco-based Crone Consulting, said. "The greater ongoing ROI will come from new customized functionality that was developed dynamically by machine learning algorithms on a highly individualized basis for each enrolled mobile wallet user."

One measurable example of this ROI will be the value derived from an increase in data-driven, customized advertising, promotions and offers.

A turning point could come with JPMorgan Chase's wallet Chase Pay. Richard Crone, CEO/founder of the San Francisco-based Crone Consulting, suggested the launch of Chase Pay, scheduled for mid-summer 2016, will be a seminal moment in mobile payments, more powerful than the bank's launch of mobile remote deposit capture.

"Chase's launch of MRDC was the single greatest contributor to attrition among credit unions and other community-based financial institutions in the history of banking," Crone said. "Every time their national advertisement played, Chase opened 10,000-plus new accounts. What if Chase Pay moves more market than mobile remote deposit capture?"

He cited mobile banking as the top reason why consumers switch financial institutions and MRDC as the top feature desired when switching.

Crone noted given Chase's ability to issue, accept and acquire assets on both sides of the electronic card equation, combined with ChaseNet's on-us processing terms and conditions secured by its 2013 deal with Visa, Chase Pay can essentially set up a closed-loop network for processing its own, "on-us" mobile payment transactions.

"They will use Chase Pay to differentiate ChasePaymentech, the largest merchant acquirer processor service, and win market by offering a truly differentiated service to merchants that is less expensive," he said.

In addition, Chase could create new revenue streams from the data it holds, worth $300 per active wallet user per year, Crone pointed out. This could happen by populating bank originated debit and credit accounts inside retailer shopping apps and mobile wallets.

Chase is also collaborating with Merchant Customer Exchange, a consortium of retailers including Walmart, Target, Kohl's, Chili's, Sunoco and Best Buy, to enable Chase Pay acceptance in its member stores, restaurants and gas stations.

Walmart Pay, the retailer's mobile wallet, has been rolled out in Arkansas and Texas, while MCX announced it postponed the national rollout of its CurrentC wallet. It appears MCX plans to center on financial institution partnerships moving forward, and Chase Pay could be the first.

Both Chase Pay and CurrentC – if it survives – will leverage QR codes and ride the ACH rails, thereby saving merchants money on swipe fees.

Not everyone thinks Chase Pay will affect credit unions.

"Based on what we know about Chase Pay to date, we are not anticipating that it will have a huge impact on credit unions as this wallet is strictly limited to Chase cards," CO-OP Financial Services Vice President of Product Development Lois Hansen said.

Hansen also pointed out, "One advantage of Chase Pay's use of QR codes on phones is that it should work with most Android and Apple phones. Android Pay and Samsung Pay work only on Android devices and Apple Pay works only on iPhones. However, paying using a QR code is often not quite as easy as tap-to-pay methods like Apple Pay, Android Pay and Samsung Pay."

She added that merchant adoption, both in-store and online, remains to be seen.

"Today, the perception is that only a few merchants are accepting Chase Pay, which will likely limit adoption," she said.

The influx of wallets in the market is just one piece of the mobile payments puzzle. Consumers are carrying less cash than ever, with 40% carrying less than $20 in their physical wallets, according to a recent Bankrate survey.

However, a lack of consumer interest is the primary barrier to mobile payments adoption. Surveys indicated the issue is less about the mobile wallet itself and more about the fact that people remain loyal to traditional payment methods and show little enthusiasm for picking up new habits. Accenture reported 52% of North Americans said they are extremely aware of mobile payments, but only 18% use them on a regular basis. Yahoo Finance reported only one in every 50 iPhone 6 owners uses Apple Pay on a regular basis.

Mobile wallets remain a novelty to consumers, who also seem inclined to wait for their financial institutions to offer mobile wallet solutions. Crone said he believes this points to an opportunity for credit unions to roll out their own branded wallets.

Celent's "U.S. Financial Institutions and Digital Payments: Digital Research Panel Series Part 3" reported financial institutions believe they should offer their own branded digital payment services. Yet, they said they are more likely to engage third-party mobile wallets than explore their own host-card emulation wallets.

Some credit unions do not have a mobile payments strategy at all – something that could be devastating for the credit union movement, Crone added. Several studies showed more than 50% of millennials will switch financial institutions to obtain a mobile wallet from their primary credit union or bank.

"Payment is a touch point most financial institutions take for granted, but it is not a touch point financial institutions can afford to lose, as it happens 60 to 90 times or more per month," Crone emphasized.

In addition, it is a personalized touch point.

"The consumer selects where to pay, how to pay, what to pay and exactly how much," he said.