This week has seen no shortage of mobile payments announcements, from a partnership between AmEx and Apple Pay to the new Chase Pay app. This flood of news isn’t a mere coincidence; rather it’s the result of the Money2020 conference in Las Vegas. Still, all these updates highlight some significant growing pains in the mobile payments market. Namely, despite there being no shortage of options available across smartphone platforms, usage is still rather low.
According to a recent Accenture survey, while 52% of North Americans are “extremely aware” of mobile payments, only 18% use them on a regular basis. Unsurprisingly, Millennials and higher-income households lead the pack, with 23% and 38% using contactless payments at least once a week, respectively.
These stats may not seem downright disappointing—mobile payment tech is still in its early days, after all. But with eMarketer forecasting 210% growth in the total value of mobile payment transactions in 2016—up to $27.05 billion from $8.71 billion—it’s fair to wonder how companies will close the gap between awareness and adoption.
According to Jordan McKee, senior analyst at 451 Research, a recent policy change could help spur growth. “One of the biggest drivers…is the EMV liability shift, which is helping to seed the market with contactless point-of-sale terminals. The infrastructure is beginning to fall into place.”
Now that retailers have a financial incentive to support EMV “chip and PIN” technology, a proliferation of in-store terminals supporting it (as well as NFC contactless payments) can’t be too far off. And when consumers have more opportunities to use NFC-powered services like Apple Pay in store, it follows that both usage and awareness will grow.
Of course, that’s only part of the equation. Even if mobile payments are readily accepted at most retailers, consumers need to see a clear value proposition. Bryan Yeager, an analyst at eMarketer, points to Starbucks (SBUX) as a model for success in this regard. The global coffee giant’s app, which handles payments and stores loyalty information, offers the convenience of a mobile wallet with incentives in the form of special offers. “More than 20% of their in-store transactions in the US are from their mobile app, and that’s a great success story.”
McKee agrees: “Most mobile wallets today are simply credit card surrogates; they’re a veneer over what already exists. This provides little incentive for merchants to upgrade their infrastructure and for consumers to change entrenched payment behaviors.”
Companies are taking notice, and adding loyalty-minded features accordingly. Android Pay, for example, is partnering with Coca-Cola (KO) to award users points toward future purchases when they tap their smartphone to buy a Coke at a vending machine. Samsung Pay, meanwhile, will add support for loyalty cards and deliver push coupons to users’ accounts.
Finally, the are security concerns to address, and Yeager identifies these as a major inhibitor to mobile payment adoption. At the same time, he points to steps Apple (APPL) has taken that could help reassure customers, including the extra layer of security offered through Touch ID in Apple Pay. Plus, “When it came out with Apple Pay, [Apple] made it clear that it doesn’t see any of the transaction data flowing through the system at all; it’s just the middleman.”
As to which of the myriad contactless payment services will gain the strongest footing, operating system-based wallets like Apple Pay and Android Pay may stand the best chance. “These solutions are tightly integrated into the device and remove many hurdles that have dogged competitors, such as onboarding and ease of use,” says McKee.
While hurdles like fragmentation and point-of-sale compatibility remain, the mobile payments market is indeed evolving. With both Android Pay and Apple Pay adding support for additional store and loyalty cards in the coming months, consumers will have more reason than ever to ditch the physical wallet.
Subscribe to Data Sheet, Fortune’s daily newsletter on the business of technology.