The following is a guest blog written by Angie Picardo, a staff writer for Nerd Wallet.
In recent years mobile wallets have grown into a more common sight when checking out at your local retail stores. With them comes the convenience and ease of paying for items digitally, but they also have the prospect of changing the dynamic of how we interact with a retailor and pay for items.
Whether you welcome this new technology shift, or are a stickler for cash and plastic payments, this new mode of payment is hear to stay, and by all accounts will grow within the next decade. In a recent story by the Wall Street Journal a graph demonstrates that by 2016 over 600 million customers will be using mobile wallets, and spending over $600 billion using this form of payment.
Given the right tools mobile wallets can be a quick and convenient checkout option. There may also be a variety of great features and incentives to use with your mobile wallet. Many of these apps will store coupons or membership cards, and can easily pull up the discount or card you need by using GPS to detect where you are.
What’s Out There?
There are numerous phones that support different mobile wallet technologies, and a variety of companies that provide apps. Most mobile wallets either work through QR Codes or near field communication (NFC). A QR Code is similar to a barcode. A mobile wallet using this approach would either generate a code on your phone that the retailer can scan, or vice versa. With a NFC enabled phone you would simply have to tap your phone or bring it in close proximity to a reader, much like a credit card that you can tap against a card reader. Unfortunately iPhones aren’t currently enabled with NFC, but QR Codes or mobile wallet apps that create an Internet connection between you and the vendor are available alternatives.
Picking the right app may take some research because certain stores only support certain apps. As the Wall Street Journal points out in the same story mentioned earlier:
“The trouble for retailers is that there are dozens of different mobile wallets out there, and no clear market leader. So, merchants who want to cover all their bases will have to support multiple wallets. And that means installing lots of different software on their sales terminals, and possibly getting new hardware, too.”
Since this can be costly, many retailers may opt to only accept a few options, and leave others out, much like credit cards. For example, they may only accept mobile wallets that use QR Codes, in which case your NFC app won’t do the trick. Mobile wallet apps may also have other limitations. Google Wallet doesn’t allow you to use merchant specific credit cards through their app, and other wallets may only allow cards to be linked if they are from specific institutions.
Mobile wallets offer the promise and benefits of making transactions quick and relatively seamless. Over the years it may also be possible that retailors will offer daily deals that are linked to your wallet. When you enter the store, you may receive a notification of the day’s deals, making your shopping experience more fruitful andfrugal.
Graph source: Wall Street Journal