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If you’ve decided to ditch your old-fashioned plastic credit card and switch to a mobile wallet, but haven’t done so yet, you have a lot of friends.
According to the WorldPay Global Payments Report 2022, the use of mobile wallets for in-store purchases in the US will increase to 15% by 2025 from 10.3% in 2021.
The study suggests that while most consumers will still choose to use old-fashioned debit and credit cards for their purchases in 2025, mobile wallets are likely to take second place.
WorldPay predicts that fewer consumers will choose cash as their payment method at the point of sale by 2025, dropping from 11.4% in 2021 to 5.7% by 2025.
If you’re wondering if it’s time to start using a mobile wallet, here’s a guide on how they work, what features they offer, and how secure payments are.
How mobile wallets work
The most common mobile wallets are Google Pay, Samsung Pay, and Apple Pay, and they are all pre-installed on the devices they can be used on.
- To start using them, add your credit cards to the mobile wallet app of your choice.
- When you are in a store that accepts mobile payments, launch the mobile wallet app on your phone and tap on the payment terminal to initiate the payment. Follow the instructions in the app to complete your payment.
- Make sure the mobile wallet you choose works with the credit cards you use, especially if the card was issued by a regional bank. Wallet providers are constantly adding banks and credit unions, but there is no guarantee that your bank’s card will work in a given mobile wallet. Call your card issuers and ask which mobile wallets they support.
- With mobile wallets, you can add not only credit and debit cards, but also loyalty cards and even electronic movie tickets, boarding passes, and a COVID-19 vaccination card.
- You can also see your card’s most recent transactions directly in your mobile wallet if your card issuer allows transaction information. Some issuers may limit the number of transactions displayed in mobile wallets.
- Some card issuers are currently offering incentives to encourage the adoption of mobile wallets. For example, Apple Card consumers can get 3% cashback when using Apple Pay at select stores and 2% cashback on all other Apple Pay purchases. US Bank Altitude™ Reserve Visa Infinite® cardholders can earn 3x more points when they make qualifying mobile wallet purchases.
Here is an overview of the top mobile wallet providers today in terms of security, rewards, functionality and adoption:
Apple Pay
How to use
- You can click to pay at NFC-enabled retail stores on supported terminals.
- Not sure if the seller accepts Apple Pay? Look for the Apple Pay logo.
Security
- When you make a purchase, Apple Pay generates a device-specific number and a unique transaction code.
- Your credit card number is never stored on your device or on Apple’s servers.
- To use Apple Pay, you must create a password on your device. For even more protection, you can use Face ID or Touch ID.
- When you add a credit, debit, prepaid, or transit card to Apple Pay, your card information is encrypted and sent to Apple’s servers.
Awards
- With the launch of the Apple Card, Apple has increased the amount of rewards you can earn with Apple Pay. You’ll earn 2% cashback on every purchase made with an Apple Card via Apple Pay.
- You’ll also get 3% back when you shop with your Apple Card through Apple Pay at a variety of merchants including T-Mobile, Walgreens, and Nike.
Supported cards
- Apple Pay has agreements with banks around the world.
- Like other mobile wallet providers, Apple Pay is constantly adding banks and credit unions to its network.
Supported Devices
- iPhone since the iPhone 6 line.
- It also works with Apple Watch, iPad devices, and MacBook Pro with Touch Bar.
Google Pay
How to use
- Click to pay at stores that offer NFC-enabled terminals.
Security
- Google Pay also uses encryption to protect your data during transactions.
- It uses tokenization where retailers receive a 16 digit number instead of your actual account number at the time of the transaction. This token is generated in the cloud.
- Before you can add cards to the Google Pay app or use it to make purchases in the store, you need to set up a screen lock on your device.
Awards
- Google Pay will provide reminders and offers related to any loyalty or reward cards you use.
- It offers promotions and promotions. For example, you can receive discounts at retail stores and earn cashback with a qualifying card when you use your mobile wallet or when you invite friends to start using Google Pay.
- You can also earn rewards in bonus categories that include credit card payments made with mobile wallets.
- You can earn up to 10 referral points by inviting new users to Google Pay. Once the referred user makes their first payment, both users will receive referral rewards.
- You can also win cash prizes when you use Google Pay. If you use Google Pay to send money to or receive money from someone, you will receive a Google Pay scratch card in the rewards section. You can then virtually “wipe” that reward card to see if you’ve won a cash prize.
Supported cards
- Google Pay works with credit cards from hundreds of banks and is constantly expanding its network.
- PayPal can be added to Google Pay if you have an Android phone.
Supported Devices
- Android phones, tablets and watches running Lollipop 5.0 or later.
- iPhone or iPad consumers with iOS 12.0 or later.
- Devices must support NFC.
Samsung Pay
How to use
- Touch your phone to pay with NFC on supported terminals.
- You can also use Samsung Pay at multiport service terminals (MSTs), which send payment via magnetic waves to a card reader.
Security
- Every Samsung Pay transaction is protected by your bank’s fraud protection services and is verified with your fingerprint, PIN, or iris scanner.
- Samsung also offers tokenization, which replaces data with identification characters.
- Your card information is encrypted in a separate data store.
- The Samsung Knox feature monitors your phone and protects it from malware.
Awards
- Samsung Rewards allows you to earn points for every purchase made with Samsung Pay. The amount you earn will depend on the merchants you buy from. Some merchants offer 2% cashback while others may offer up to 5% cashback.
- You can redeem these points for gift cards or use them to play instant win games.
- You can also earn rewards in bonus categories that include credit card payments made with mobile wallets.
Supported cards
- Visa, Mastercard, American Express and Discover cards offered by partner banks.
- More than 1,000 banks and credit unions work with Samsung Pay.
Supported Devices
- Samsung devices with NFC technology.
- MST coverage may vary by country.
- This includes the latest Galaxy smartphones and Gear smartwatches.
Are digital wallet transactions secure?
Glenn Fodor, senior vice president of competitive intelligence at First Data, said one reason only a small percentage of consumers use mobile wallets is security concerns.
Consumers fear that purchases made with their phones and mobile wallets are unsafe and their personal financial details could be exposed, he said.
However, mobile wallets provide sufficient security for your purchases. These services are based on data encryption and tokenization so that retailers never see your credit card number.
While mobile wallet transactions are safe, replacing plastic with a phone comes with other risks. The main one on this list loses his phone.
In this case, mobile wallet providers offer services such as Samsung’s Find My Mobile or Apple’s Find My to help you locate your phone, lock its screen, or block access to mobile wallet apps remotely.
Cyber thieves or malware infection are other risks that you should be wary of. There are things you can do to try and avoid or prevent these attacks, such as installing security software.
What mobile wallet to use?
You will probably use a mobile wallet linked to your phone because there is little difference between the main mobile wallets available today.
“No one is going to switch from a Samsung phone to an iPhone just because of a mobile wallet,” said Daniel Choka, former managing director of Mobile Money Matters.
This means it’s easier to use Apple Pay if you have an iPhone, Samsung Pay if you have a Samsung phone, and Google Pay if you have an Android.
You can also use a third-party mobile wallet such as Walmart Pay, which you can use when shopping at Walmart stores.
bottom line
With mobile wallets, consumers can be less concerned about sensitive information being stored by retailers during a transaction, as Apple Pay, Google Pay, and Samsung Pay protect their customer information with data encryption and tokenization.
Mobile wallets are also convenient and secure for consumers who are looking to minimize the number of cards they carry in their pockets and for those who want to earn rewards on digital platforms.
*All Apple Card and US Bank Altitude™ Reserve Visa Infinite® Card information has been collected independently by CreditCards.com. The Issuer has not provided the content and is not responsible for its accuracy.
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