Understanding Mobile Wallets
We've all been there: you're waiting in line at the grocery store and the person in front of you is slowly rummaging for the right credit card—or worse, pulls out a checkbook. As you stifle an internal groan, think positive: quicker payment options are here!
While Apple Pay™ and Android Pay™ have recently been making headlines, the technology behind them—near-field communication (NFC)—has been available for some time. Because NFC is being included in more devices (like the iPhone® 6 and new Android™ and Windows® smartphones) and because merchants have been upgrading their payment systems to accept smart chip credit cards (likely becoming NFC-ready in the process), the technology is now poised to go mainstream.
How it works
NFC enables two devices placed close together to communicate data. To get started
- Load your credit or debit card information into your device's mobile wallet app.
- When you make in-store purchases, look for the Visa payWave® or MasterCard PayPass® symbol at the credit card terminal.
- Simply tap or hold your device at the terminal. You may be asked to scan your finger or enter a PIN to approve the transaction. That's it!
- You can use a mobile wallet for in-app or online purchases, too. Some also enable you to store gift cards, loyalty cards and coupons in addition to credit and debit cards.
Why it's secure
Security measures vary depending on the mobile wallet. Many don't show your full card number to the merchant. Apple Pay and Android Pay, for instance, generate a random, virtual account number rather than transmitting your card number. For in-store purchases, because your payment method stays in your hands, you won't reveal your name or security code, either. If you lose your phone, many devices enable you to lock it remotely or completely remove any personal information.
This article is intended to provide general information and should not be considered tax or financial advice. Please consult a tax or financial advisor for specific guidance on tax laws and your individual financial situation.
*Message and data rates may apply. Terms and Conditions are available. Apple® and iPhone® are trademarks of Apple, Inc., registered in the U.S. and other countries. Apple Pay™ is a trademark of Apple, Inc. Android™ and Android Pay™ are trademarks of Google, Inc. Windows® is a registered trademark of Microsoft Corporation in the United States and/or other countries. Visa payWave® is a registered trademark of Visa Worldwide PTe Limited. PayPass™ is a trademark of MasterCard International Incorporated.