Mobile Wallets?

As more and more companies and consumers begin contemplating the idea of mobile wallets, many are asking, ‘What are mobile wallets, how do they work and will they ever truly replace the need to carry a physical billfold?’ Available in various forms, mobile payment options can be confusing. In an effort to cut through the noise, we will attempt to lay out some basic facts about these slick new products, and inform merchants of what will likely change the way credit cards are accepted in the future. In definition mobile wallet technology is the use of near-field communication (NFC) chips located inside smart phones and tablets to transmit payment information. The consumer selects a payment account, the charge amount, enters a secure pin and then simply touches the device to an enabled payment terminal where the payment information is transmitted. Pretty sharp! However, given the fact that these applications are still very new and not yet widely adopted by merchants or consumers, many still have questions on the day-to-day practicality of the utilization and acceptance of mobile NFC payments.

Will they work at all stores?

Within the Mobile Wallet industry, there are two companies that are leading the charge. The first is Google, who has a mobile payment application that will initially only work at locations currently using MasterCard PayPass to accept payments. The second is Isis, who like Google, uses PayPass terminals for acceptance. Although both companies currently have many merchants accepting mobile payments, it will likely not be widely implemented until there is more of a demand by consumers to be able to utilize this technology. 

Will I be able to use all of my cards?

Both Isis and Google currently allow users to add debit/credit cards or their U.S. Bank account to their application and select which account they would like to use at the time of purchase. You can also add merchant rewards and discount cards to your account, allowing you to always take advantage of special offers and bonuses from specific businesses.

Is it secure?

In an age where consumers’ personal information and card data is at more risk than ever before, the big question on everyone’s mind is PCI (Payment Card Industry) security. That being said, it has become one of the major selling points for companies endorsing Mobile Wallets.  These companies use a secure PIN similar to the way consumers pay with debit cards, however in addition to the PIN number, the applications use your phone’s secure NFC chip that can only be accessed by the payment app. The creators have also made it the standard process of generating a unique transaction ID each time you make a purchase, making unauthorized or fraudulent charges far more difficult than standard credit or debit cards. Both carriers also offer 24/7 fraud monitoring and protection at no charge. However, the system is not perfect and many QSA’s (Quality Security Assessors, responsible for upholding Payment Cards Industry standards) believe that based on the unsecured nature of personal phones, account data could potentially be compromised in spite of all the preventative precautions. 

It will be exciting to see how Mobile Wallets will evolve in the coming months, once they are fully embraced by consumers. The idea of being able to leave your physical wallet at home is an exciting proposition, but whether or not they will ever truly be replaced is yet to be seen.

For more information on the benefits and details of Isis and Google Mobile Wallets, click on the visit the links below:

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