I've been using GNU/Linux on my phones for the last 18 years, initially as a portable hacking platform back when I was a teenager and now as the most practical mobile OS for me. I often see people mentioning these areas as something they "can't see becoming competitive", but this doesn't really match my experience. It feels very much like what running GNU/Linux on a PC without having Windows around felt like 10-15 years ago or so and it very noticeably keeps moving forward over time.
My experience today is that I have all the applications I need daily, and the odd ones I don't have natively I can run in Waydroid. There are currently some limitations when it comes to access to hardware from within the container, but nothing that couldn't be overcome with some moderate effort. The only real blocker is remote attestation, but I see it as a threat to the whole fabric of society, not just Linux phones, and it should be opposed regardless of platform one uses.
I don't really get tap-to-pay. I never thought it's something I want or need to have on my phone (which doesn't even have NFC, though it could be added as an extension). I just use a card. I get it that it may be slightly more convenient, but definitely not worth changing the OS over, let alone giving others control over my phone. That said, I have full access to my bank account from my phone anyway. Practically everything except TOTP payments (Blik) can be done from the Web (and with Epiphany's webapps it's just there as an app to launch), and Blik can be used from the Android app in Waydroid. Frankly, if I couldn't access the bank from my phone I would rather change the bank than the phone, and would make sure to let the customer service know very clearly why I'm doing that.
And when it comes to camera quality, matching the state-of-the-art overprocessed mess would be hard, but having played with camera processing a lot recently I can say that perfectly adequate quality is absolutely well within the reach (if not there already for daylight photos). I only researched absolute basics of photo processing and implemented some essential stuff while completely ignoring others and I'm already quite happy with the photos I get (https://social.librem.one/@dos/tagged/shotonlibrem5) and there's enormous room for improvement still that only needs someone who knows what they're doing to sit down and implement things that are missing. Some of that stuff is already happening around libcamera as more people get involved there thanks to laptops with webcams that also need similar software handling. The particular phone I'm using doesn't have hardware video encoder (only a decoder) so video recording will stay low res there forever unless limited to short clips, but it's not a limitation inherent to the platform, just to this specific device.
I have briefly carried an Android device as a secondary phone some 10 years ago out of necessity (N900 was starting to get too old to handle the Web and Librem 5 did not exist yet) and it felt quite miserable, it seemed like an appliance rather than a personal computing device despite of equipping it with microG, F-Droid, rooting it etc. When you're used to being able to script a simple thing right on your phone using whatever technology you already feel comfortable with, it's hard to give it up. Just try to patch a simple thing from the system's core on an Android phone - yes, it's possible if you're really determined, spend a lot of time on it and don't mind attestation issues, but I can do that with dpkg-buildpackage on my phone's screen within minutes, send a patch upstream and have it actually merged in time it would take my laptop to produce an Android image. I may not exercise this ability a lot in my daily use, but having such possibility is incredibly empowering. I can't see Android becoming competitive there, quite the contrary ;) The only actual obstacle I see on the path to growth is the threat of remote attestation gaining widespread use and this affects any existing or future platform from outside the duopoly, not just GNU/Linux in particular, and I believe this still isn't a lost game.