The pros and cons of mobile payments. Mobile payments are advertised as a quick and convenient way to pay for anything. Just tap your smartphone to the payment terminal and — like magic — your credit card is charged for your purchase. It really couldn’t be easier.
However, digital payments are a little more complicated than that. Paying for purchases with your smartphone can be convenient, sure, but the technology causes frustrations of its own. So if you don’t know whether you want to tie your credit card to your smartphone just yet, check out these pros and cons of mobile payments, and learn what’s required for them to work.
What You Need to Make Mobile Payments
For digital payments to work, several pieces need to fall into place. First, you need a phone that can make mobile payments — typically, a higher-end smartphone with near-field communication (NFC) to let it talk to payment terminals. Then you need to set up your existing credit cards in the mobile wallet your phone supports. Usually, that’s Apple Pay for iPhones, Google Pay for Android phones, and Samsung Pay for Samsung phones.
Next, the bank providing your credit card has to accept your mobile payment platform. And finally, the place you’re shopping at needs to accept mobile payments from your chosen payment app. If any of those things don’t happen, you aren’t making a mobile payment.
Mobile Payment Pros
When mobile payments work the way they’re designed to, they’re not just convenient, they’re astonishingly convenient. What else makes mobile payments so great?
All you have to do to pay is tap your smartphone (or smartwatch) to the payment terminal and authenticate the transaction, usually with your fingerprint. Then you can walk out of the store. You don’t have to dig through your wallet, swipe a card, or sign anything. Just tap and go.
Most mobile payment apps are tokenized, which means they don’t store or send your credit card information. When you initially enter your card information, the app verifies it with your bank and afterwards, uses a “token” as a stand-in for your personal information. Each transaction is made using that token combined with a one-time-use security code. Even if a hacker got these things, they wouldn’t be able to use your credit card.
They’re more physically secure, too.
If your phone is lost or stolen, a thief won’t be able to run up big credit card bills. Why? Because your payment information should still be secured behind a passcode or biometric authentication (or both). If you’re carrying cash or credit cards, your money is as good as spent if a thief makes off with your wallet.
They’re widely accepted.
Most major retailers accept some form of mobile payment — though not always the one you want to use. If you’re in an urban area, there’s a good chance you have a lot of mobile payment options.
Everything’s on your phone.
You don’t have to carry cash or cards around because everything you need to make a purchase is on your phone (and you’re probably carrying that anyway).
They work with rewards programs.
Most mobile wallets let you add store loyalty or rewards cards. When you make a mobile purchase using a credit card in the wallet, it’ll automatically link the purchase to your rewards program. Thus, you get all the benefits of a rewards programwithout having to carry the card in your wallet.