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Can Your Phone Replace Your Wallet?

By Judi Jacobs June 16, 2017 Lifestyle

Smartphones have significantly changed the way we go about our daily lives. Whether it’s hailing a ride, ordering food, buying groceries or communicating, there is no denying the revolution with the proliferation of phones.

Being able to use our smartphone to pay for stuff at Target, Walmart and other major retailers is another way smartphones are starting to change our everyday world. With all the major players having their own version of digital wallets (e.g., Apple Pay, Android Pay and Samsung Pay), it won’t be long before plastic credit cards and cash will be a thing of the past.

Understanding the how and why of mobile payments, or digital wallets, now will put you ahead of the curve and ensure you feel comfortable with this new technology.

Digital Wallets, Global Trends

Research has shown significant growth of digital wallets across the globe from Europe to Asia. According to Visa European News, people have made big changes to how they pay for things over the past few years. The number of Europeans regularly using a mobile device for payments has tripled since 2015 (54% vs 18%).

Seventy-four percent of British consumers are “Mobile Payments users” – people who manage their money or make payments using a mobile device. The fastest growth rate for mobile banking adoption is with 55-64 year olds.

We see even higher numbers in China as Mobile World Live reports the nearly 65 percent of China’s smartphone users, or about 425 million people, make regular payments on their handsets. That percentage is up seven points from December 2015.

The US lags in the adoption of mobile payments, but that will likely change in the coming years. In addition, contrary to European users, early adopters in the US skew to the millennial age group (18-32), versus the Baby Boomer generation.

Mobile Money Mindset in the US

So why is it taking the US longer to get on the mobile wallet bandwagon? Misinformation regarding security continues to be a concern when it comes to using digital wallets. While being safe online and with our devices should be a concern for everyone – which I often write about it in my blog – using mobile payments is one of the safest ways to pay.

Retailers don’t have access to your card number, because each purchase uses a unique transaction number, not your account or credit card number. Your account number isn’t even stored on your phone. The account information is encrypted and can only be accessed with a passcode or fingerprint, depending on how you set up your phone.

In addition, if you lose your credit card or cash anyone can pick it up and use it. If you lose your phone, your bank account is the least of your worries because it is protected by your fingerprint or passcode. When it comes to fraud and identity theft, using a mobile wallet makes it virtually impossible to become a victim.

So How Do I Get Started?

The first step to getting started with using mobile payments is to simply download payment apps or set up ones already on your phone, such as Apple Wallet, Android Pay or Samsung Pay. Set-up requires adding your credit card information, which can be done by simply taking a photo of your card. Some credit card companies will require you to call to verify your card, a process the app walks you through. You can add as many credit cards as you wish.

It’s time to start shopping! When you go to a store, look at the symbols at the terminal and it will tell you what type of mobile payments they take. If they accept the mobile payments you have set up on your phone, all you need to do is place your phone close to any Near Field Communication (NFC) card terminal and put your thumb on the phone’s touch ID sensor or enter your passcode. That’s it! Tap and pay!

Don’t Be Shy

Although it might be intimidating the first time, the cashier will be able help you through it. Once you see how easy it is you might be ready to toss the plastic, although, besides the security concerns, the other barrier to higher usage in the US has been the availability in retail establishments. This is quickly changing, but we aren’t ready to get rid of our cash just quite yet. So, for the near future you will need to have cash and credit cards on hand for those smaller independent stores, as well as for things like tips and parking.

Your phone is already in your hand, pocket or purse, so why not start using it as your wallet?

Have you ever used your phone to pay for something? If so, how and what app? Are you going to try? Why or why not? Please share your thoughts in the comments.

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The Author

Judi Jacobs is a lawyer-turned-tech nerd and the founder of The Tech Wizard. As a tech coach and consultant, Judi works with adults 50+ and small businesses to help make technology more user-friendly through small group classes and one-on-one training. Learn more at

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