The process of making purchases “on the go” is getting faster and easier due to new technology available on many popular smartphones. According to one industry source, in 2012, there were more than 6.8 billion mobile phone accounts in the world, many of which included a payment-enabled feature that allows a consumer to perform payment transactions from a mobile phone. These payment-enabled phones are sometimes referred to as “mobile wallets.”
A “digital wallet” is an online site that provides a secure method to make online payments—such as PayPal. PayPal maintains a buyer’s payment information so that online purchases can be made without revealing the buyer’s credit card or bank account information to the seller.
These services are available on a smartphone, such as an iPhone or Android. A mobile wallet allows consumers to make purchases “on the go” as long as Internet or cellular service is available.
Many digital wallet companies, such as PayPal, also have a mobile wallet. The first step towards using a provider’s mobile wallet is to sign up for its digital wallet, as it’s much easier to register credit card or bank account information on a computer than it is on a smart phone.
Once registered to the digital wallet online, download the provider’s corresponding mobile wallet app, enter the registration information and the smartphone will become payment enabled.
At some businesses, purchases can be made using a smartphone’s mobile wallet with Near Field Communication (NFC). When checking out, the smartphone sends a signal to the store’s NFC reader to pay for the items. For instance, to use a PayPal account to buy items through NFC, enter your mobile phone number into the store’s PIN reader at the checkout counter and it communicates with your smartphone to complete the transaction.
Consider this scenario: After you’ve spent the day at the mall with your friends buying things with your new mobile wallet, you might stop for a bite to eat. When the waiter delivers the bill, you can use your smartphone to pay for your friends’ meals or to collect each person’s share of the bill. All you need is a mobile credit card reader.
To set up a mobile credit card reader, download an app to a smartphone, create an account and wait for the secure reader to arrive in the mail. The reader plugs into the headphone jack on a smartphone. To take a friend’s payments for their meal, enter the amount, swipe their credit or debit card and have them sign the screen using their finger.
Companies that produce mobile credit card readers make money by charging approximately 2.75 percent per transaction. With the mobile credit card reader, you’ll have the upper hand the next time you run into someone who owes you money, but never seems to carry cash. When they show you their pockets are once again empty, just pull out your smartphone and mobile card reader and say, “Will that be credit or debit?”
Today’s technology is making financial transactions easier, faster and more secure. A little knowledge goes a long way toward simplifying your everyday transactions.
Formed in 1974, the Independent Bankers Association of Texas (IBAT) represents Texas community banks. The Austin-based group is the largest state community banking organization in the nation, with membership comprised of more than 2,000 banks and branches in 700 Texas communities. Providing safe and responsible financial services to all Texans, IBAT member bank assets range in size from $10 million to $20 billion with combined assets statewide of nearly $165 billion. IBAT member banks are committed to supporting and investing in their local communities.