As technology advances, so does the way we pay for goods and services. With advancements in wireless technology, such as near-field communication, people are finding that paying for items can be just as easy as running their phone over a merchant’s payment system. In some cases, you might be prompted to do a fingerprint scan, but the results are always the same: paying for items without pulling out your wallet.
Mobile money services are popping up all over the place. Google Wallet, Apple Pay and SoftCard are just a few examples of services that already allow you to pay using NFC. Some big companies, including Wal-Mart, are coming up with their own mobile money payment systems. With so many companies switching to or now accepting mobile money, it’s important that people know the pros and cons.
Pros:
Nearly Everyone Has Access to Mobile Money
We live in the age of technology. It is hard to walk down the street and find many people who aren’t carrying mobile phones. This is good news as far as mobile money is concerned because every smartphone is a potential payment solution if it supports NFC.
More Secure
While the jury may still be out on just how secure mobile money and NFC is, one thing is for sure: It’s more secure than swiping your credit and debit card through the register. This is because most merchant payment systems store your card number when you scan your card. Having your card number stored in multiple merchants’ payment systems is never good. All you have to do is look back to the scam that resulted nearly 40 million shoppers’ credit and debit card information stolen from Target on Black Friday as an example of just how unsafe swiping your credit card can be.
While on the subject of being more secure, it’s important to note that there are some pretty good security features on a number of these mobile payment systems. As mentioned above, some ask for fingerprints before you are allowed to use the mobile wallet app. Needing to provide a fingerprint is a lot more secure than simply having to show photo ID or entering a pin, both of which can be easily obtained by hackers.
More Ways for Customers to Pay as They Go
For companies, mobile payment systems are good because it gives consumers different ways to pay for services. The more ways that a company can offer a person to pay, the more likely the company is to get the shopper’s business. With the rise of credit and debit cards, more companies switched from just taking cash to putting in card readers. We are now in the middle of another revolution with more companies switching to taking mobile money. Convenience is always good for both companies and consumers.
Easy to Keep Up With
If you are someone who likes to keep up with your spending, mobile wallets are for you. Most provide you with files that you can easily export. Intuit GoPayment is an example of a program that exports your spending habits to QuickBooks. For companies, this can make keeping up with the purchase of company goods and budgets quick and easy. For consumers, this can make it easy for you to keep up with a monthly expense report.
Cons:
Cannot Live Without Plastic or Cash Just Yet
While mobile money has made huge leaps in the past few years, you still cannot live without your credit or debit card just yet. This is because there are still many merchants who don’t accept mobile payments. The pool of merchants who don’t is shrinking by the day, but for now, you are still going to have to pull out your wallet from time to time.
Convenience of Easy Pay
One of the pros is that you can easily and quickly pay for goods and services. Unfortunately, this is also bad for people who don’t have much control over impulsive spending habits. According to The Globe and Mail, mobile payment systems could be dangerous for people who can’t control themselves when it comes to spending. This is especially true since many of these mobile wallets come with geolocation services that inform users when they’re near stores that are holding sales. These are stores that they might not have otherwise visited.
Not for Everyone
While there are some people who embrace changes in technology, there are always those who do not. This often includes, but isn’t limited to, elder populations. People who are not up to date with technology aren’t likely to use this service. This is one reason why not all companies are switching over to taking mobile payment options only. They continue to provide service to people who don’t want to switch or lack the technology to do so.
Jessica Kane is a professional blogger who focuses on personal finance and other money matters. She currently writes for Checkworks.com, a leading supplier of personal and business checks.