Mobile Wallets: Moving Shopping Into the Future

A more secure and convenient way to make payments

12/05/2018

Mobile WalletsThese days, most transactions don’t involve physical money, so why should they involve physical wallets? Thanks to new technologies like Samsung Pay, Google Pay (formerly Android Pay) and Apple Pay, you can now use your smartphone to securely make transactions without ever having to take out your credit card.
 
According to the latest survey data from market research firm CMB, only about 15 percent of smartphone users actually utilize these technologies to pay for purchases, but usage nearly doubled in the past 3 years and will likely continue to rise as the benefits of mobile wallets are better understood.
 
If you are not sold on the idea of joining the new trend, here’s why you may want to reconsider:
 
Ease of Use
A mobile wallet is an app that can be installed on a smartphone, or may even come pre-installed. Investopedia explains how they work: “Once the app is installed and the user inputs his payment information, the wallet stores this information by linking a personal identification format like a number or key, QR code or an image of the owner to each card that is stored.”
 
Once everything is set up, the mobile app uses a radio-based technology called Near-Field Communication (NFC) that communicates with the merchant’s point-of-service terminal. In other words, you only need to wave or hold your device over a store’s reader to make a payment.
 
Security
Because mobile wallets use encrypted payment codes and never actually transmit your account number, your card number is not passed on to the merchant. This makes it a safer payment method. In addition, paying with a mobile wallet requires your fingerprint or personal identification number to process a payment, making it difficult to access your money.
 
“Even if a thief bypassed all the security, the risk to you is low,” Jeff Blyskal writes in an article for Consumer Reports. “Mobile wallets usually require an underlying credit or debit card to fund transactions, and those cards limit your liability for erroneous or fraudulent charges to little or nothing.”
 
Convenience and Incentives
Mobile wallets can be used for more than just emulating credit and debit cards. “In addition to payment cards, the mobile wallet can also be used as a storage device for driver’s license, Social Security Number, health information cards, loyalty cards, hotel key cards and bus or train tickets,” Investopedia explains.
 
Thanks to mobile wallets, you can carry hundreds of rewards cards virtually, making it easier to keep track of the ones you own and to remember to use them. You can even use mobile wallets to make online payments, removing the tedious need to enter dozens of digits for each transaction.
 
You can also save money with various reward programs. For example, Google Pay offers rewards for using the app at selected partners, while Samsung Pay offers a tiered rewards system based on how many monthly purchases you make with it.
 
Widespread Adoption
So far, the main obstacles faced by mobile wallets are the different payment methods. While almost all modern smartphones will support Samsung Pay, Android Pay, Apple Pay or a combination of these, all three of these apps may not necessarily work at all retailers.
 
“Samsung Pay can be used at more than 10 million U.S. stores, Apple Pay at more than 3 million stores, and Google Pay at more than 1 million stores,” Blyskal says. “The numbers will grow as retailers upgrade their payment card readers.”
 
Being able to use Samsung Pay at more than 10 million stores easily makes it the most attractive of all the mobile wallets, but you have to own a Samsung smartphone to use it. The upside is that it works everywhere: according to Ethan Wolff-Mann in an article for the Time’s Money, “[Samsung Pay] works everywhere, since it can mimic a magnetic strip if NFC technology is unavailable; retailers don’t get your credit card info.”
 
This doesn’t mean that Samsung will continue to be the best option for smartphone owners interested in mobile wallets, as both Google and Apple are strongly invested in using this technology to sell smartphones and will continue to implement rewards for using them. Furthermore, using a mobile wallet speeds up transaction times, which gives retailers extra incentive to adopt NFC-capable card readers.
 
For the time being, mobile wallet adoption across retailers may still not be good enough to leave your credit card at home. In the future, however, it’s very likely you’ll never need to go out shopping with more than just your smartphone. Why not begin today?
 
Getting Started is Easy
Spending and receiving money is simple and safe with a digital wallet. It’s easy to set up, just add your North Shore Bank debit card or credit card to your device. Learn more about Digital Wallets.

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