Paying With Your Phone — The Perks and The Pitfalls

24 Oct 2013
by John Foley
Uncategorized

Pop Quiz: You are at the game and you’re getting hungry, so you go get some food. They don’t take credit cards, you don’t have cash, and the volunteer suggests you use the PayPal app. What do you do?

Grab Your Mobile Wallet

Sooner or later, if you have a smartphone or tablet, there will be an opportunity to pay for something using an app instead of pulling out your wallet. It might be at the Snack Shack on the local playing fields during a game, or at an art market you’ve been strolling through. Paying with your phone can be as convenient as pulling out a card. “Mobile wallets” are so popular that the Federal Trade Commission had a workshop on mobile payments last year in an attempt to catch regulations up to the technology exploding around us. Many people are unsure about using this potential perk but it is worth learning how to use your mobile wallet.

Know What Your Mobile Wallet Can’t Do

Using your phone to make a payment securely means you need to understand how the process works. You can load a cloud-based app that links to your bank or credit account and follow the app’s protocol to make your payment. This can be a code to scan at checkout or a button you hit or accessing PayPal at the retailer’s terminal if they have it set up. Square Wallet and LevelUp are examples of this type of mobile payment.

Other apps rely on near field communication (NFC), a compatible phone, and a special NFC payment terminal. Google Wallet and Isis Mobile Wallet use this technology. As Kiplinger.com explains, the phone is touched to the terminal and the information is transferred.

Every type of mobile payment app will be slightly different and you need to know four things:

  • Will it work on your phone?
  • Will it work with your data plan? (Look into what your data offers- For example, compare 3G vs 4G on T-Mobile, or whichever service provider you use)
  • Will it work with your accounts?
  • Will it work for places you hope to use it?

Answering those questions will help you choose the best app for your situation.

Keep Your Money Safe

According to the Federal Communications Commission, consumers should protect their smartphones, data, mobile wallet apps and services from theft and cyber attacks. That means you are the final safeguard for your financial security.

  • Treat your phone like the precious asset it is, and don’t leave it lying around
  • Set up separate PINs for your phone and the mobile wallet app, and use them
  • Have your contact information displayed on the “lock” screen so it can be returned to you if lost
  • Have the procedure for reporting a stolen device available and follow it if your phone is stolen
  • Install and maintain security software
  • Monitor your financial accounts
  • Don’t conduct financial transactions over a non-secure network like public wi-fi

The Future Of Paying With Your Phone

Mobile payment options are growing and the future looks like it will definitely include the ability to use your phone to pay your bill. T-Mobile, for instance, is rolling out a nation-wide launch of the ISIS Mobile Wallet this year. Pay attention, and you can pay safely with your phone.

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