A Smart Shopper's Guide to Mobile Pay

December 28, 2017
Meagan C., Financial Expert

I consider myself to be quite trendy, but I’m also that friend who regularly uses checks to pay bills. I am aware that there are plenty of innovative payment options available, but something about paper checks seems so irresistibly simple. The intangibility of online money transfers, amongst a myriad of mobile apps, just seems untrustworthy to me. With this wave of skepticism, I set out to learn about the latest trend in financial services: mobile wallets.

Lesson #1: A mobile wallet uses near-field communication technology to make payments.
Essentially, near-field communication (NFC) technology allows mobile devices, such as smartphones, to communicate with other electronic devices. With a single tap, a smartphone sends and receives information through short range radio transmission. This technology allows a mobile wallet user to pay by holding his or her phone close to a receiver at the cash register. The smartphone exchanges information with the receiver, the user will type in a PIN, and the transaction is complete.  

Lesson #2: Compared to traditional card payment, a mobile wallet offers increased security.
While both card and mobile payments encrypt user information, a mobile wallet goes a step further. Instead of processing and then encrypting card information, a mobile wallet generates a unique token. These tokens are not comprised of card information, rather randomly generated 16-digit numbers. Tokens are often limited to a specific device, merchant, or number of purchases. By substituting card credentials with digital tokens, mobile wallets create an extra layer of protection against hackers. 

Lesson #3: A mobile wallet provides an added level of convenience for all sorts of purchases. 
Research conducted by the Federal Reserve reported that 40 percent of merchants currently accept mobile payments and another 40 percent plan to accept them in the future, according to Visa. From grocery stores to your favorite coffee shop, retailers are steadily adopting and implementing this technology. Additionally, mobile wallets provide a unique benefit, as users can enroll in and store loyalty cards with ease. That means no more digging around for keychain-sized pieces of plastic or rattling off your phone number!

Lesson #4: Switching to a mobile wallet is truly effortless. 
Switching to a mobile wallet is a painless, three-minute process. Most smartphones will automatically have a mobile wallet app such as Samsung Pay or Apple Pay included in its latest software update. Users can navigate to the designated payment app, log into their Samsung or Apple accounts, then register their fingerprints for payment authentication. Users will also 
create a PIN, as an alternative form of authentication. Lastly, debit and credit card information is added by simply snapping a picture of the card. 

While it is common knowledge that “cash is king,” the popularity and usefulness of a mobile wallet is on the rise. In the process of writing this article, I experimented with Samsung Pay. I must admit: it’s hard to challenge the convenience of a mobile wallet. With long grocery store and holiday shopping lines, it truthfully sped up my checkout time and made me look like a 
digital wizard. What do you think? Are mobile wallets really the way of the future? Share your thoughts on mobile wallets in the comments section below!

Tags: Tips and Tricks, Money Management