Mobile wallets such as Apple Pay and Google Wallet have the potential to be revolutionary. Imagine running to the store with only your smartphone and car keys! However, many consumers are wary of these mobile payment apps for a variety of reasons. Some don’t trust the security of these features, while others just don’t want to make a switch. Learn about the pros and cons of mobile wallets and make the choice for yourself.
How Mobile Wallets Work
Understanding the way these mobile credit cards work will help you become more comfortable with the apps. Whether you’re an iPhone or an Android user, the technology works the same. First, you put your credit or debit card into the app. When you use your phone as a credit card at the register, a single-use code is generated for that individual transaction. Essentially, mobile “credit cards” use the same method of safety as EMV (chip and pin) cards, and are even more secure than old debit and credit cards that lack the extra layer of security those chip-embedded cards provide.
Advantages of Mobile Credit Cards
Using Apple Pay or Google Wallet is safer than dealing with plastic. The first advantage comes with the fact that we are more likely to lose our wallets than our phones. People tend to have their phones with them at all times, and if you phone is lost or stolen, then you can track your device or erase all information. Losing your wallet requires you to call every bank and credit card company to cancel your card and order a replacement.
As mentioned in the previous section, mobile wallet apps don’t actually use your credit card information. And iPhone users will be happy to know that Apple Pay doesn’t even store your credit card info; it uses a special security code instead. Whether you’re Team iPhone or Team Android, your transactions are secure. In fact, you need to authorize each purchase by entering a PIN or using your fingerprint. In the event that your accounts are compromised, your mobile credit card transactions are protected with the same fraud policies that apply to traditional credit or debit transactions.
People with plenty of gift cards and rewards cards will enjoy these mobile wallets as well. While not all retailers have released mobile wallet compatibility, you can trim down your key ring and wallet by adding your Starbucks card. With the popularity of mobile wallets projected to increase, expect your favorite stores to follow suit.
Disadvantages of Mobile Credit Cards
We’re only listing one disadvantage, but it’s a pretty big one: not all retailers accept mobile credit cards.
Some retailers might refuse mobile wallets because they want to implement their own payment system; for example, Walmart and Target aren’t keen on mobile wallets, but Whole Foods and McDonald’s are. Some stores just aren’t equipped to handle the technology—but with the advent of EMV cards, new terminals are likely to be compatible with your mobile wallet.
Featured Image: Thinkstock/oatawa
