Do You Need a Mobile Wallet App?
Most of us have bulky wallets. On average, each of us has four credit and debit cards, a driver's license, a handful of loyalty or rewards cards, and maybe a few membership cards for places like the gym and the library. We also have a little cash and several receipts. Whether we stow our bulky wallets in our back pockets or our purses, we dream of being able to grab our phone and keys and have everything we need for the day. Electronic wallets offer a solution that gets us a step closer to achieving this aspiration by consolidating many of the cards we use daily onto our phones.
Finding the best wallet app can be challenging because there are many decisions to make about what features are most important to you as well as considerations regarding device-specific availability. If you're looking for an app that enables you to pay back or transfer money to a friend, check out the P2P Payments review. You can also read articles about mobile wallets and other solutions that can help you manage your finances. If you're a merchant wondering if you should accept payments made using mobile wallets at your business, or if you need to know which mobile wallets may be most advantageous to accept at your establishment, we've included a section specifically for you at the end of this article. If you're looking for mobile credit card processing companies, read our review for our top picks.
Find the Best Mobile Wallet App
The four biggest names in the mobile wallet arena are PayPal, Apple Pay, Android Pay and Samsung Pay. Although PayPal can work on nearly every phone, Apple Pay and Samsung Pay only work with specific phones from each respective brand. Android Pay is widely available across several different phone brands, but your phone must run on the Android operating system in order to use it. Each of these four mobile wallets can be loaded with all major credit and debit cards. You can use PayPal to pay at participating retailers, and Apple Pay, Android Pay and Samsung Pay can be used to tap and pay with your phone at retail locations that have contactless card readers. PayPal is unique in that it also gives you the option of connecting to your bank account and it's one of the few mobile wallets that you can use to send and receive money from friends as person-to-person payments.
Among the other mobile wallets on the market, there's variance in the information each wallet holds and in how it can be used. Some mobile wallets, like Capital One Wallet, work exclusively with cards from a specific card brand or bank, while others, such as Walmart Pay and the Starbucks' mobile wallet app, can only be used at a specific store. Other mobile wallets may only work for certain types of cards, such as Gyft that manages gift cards or Key Ring that manages loyalty cards. Some mobile wallets can't be used instead of physical cards to pay in stores, but are primarily used as a means of having a digital record of your physical cards. Of this type of mobile wallet, LifeLock Wallet is one of the few that can hold your ID cards, such as your passport and driver's license, while eWallet stores your cards and manages your passwords, which may be useful if you frequently shop online through your mobile device.
What Do the Best Digital & Electronic Wallets Do?
Most mobile wallets are free, which means that you can download them and try them out without incurring cost; it also makes using more than one mobile wallet in order to gain maximum utility a viable option. Consider the mobile wallet's functionality for the following card types when looking for the best mobile wallet.
- Credit & Debit Cards: The primary function of a secure wallet app is to store your credit and debit cards, and the best apps enable you pay with them using your phone instead of the actual physical cards. Additionally, the best mobile wallets give you the option of storing a variety of cards, including major card brands, cards from national and local banks, and store-branded cards.
- Loyalty Cards: While loyalty cards can help you earn nice discounts or freebies at the establishments you frequent most, nearly every grocery store, restaurant and boutique offers one, and you can quickly accumulate a hefty stack of cards. For this reason, the best digital wallet companies enable you to store your loyalty cards and track your points on each card.
- Gift Cards: It's easy to forget to use the gift cards that you receive; in fact, in 2015, nearly $1 billion in gift cards was never redeemed, due to lost or forgotten cards and small, unused balances left on the cards after a purchase. The best mobile wallets allow you to store gift cards, which can help you keep track of and spend every cent on them.
Are Mobile Wallets Secure?
Many smartphone users resist using a wallet app because of security concerns. However, the best mobile wallet apps have superior payment security; they utilize tokenization and encryption technology that make point of sales transactions made using mobile wallets more secure than those made by swiping physical cards through magnetic stripe card readers.
The biggest security threat isn't inherent to the transaction process but rather to the physical loss or theft of your phone. Because of this, if you choose to add an electronic wallet to your phone, it's critical that you protect your device by locking the home screen using a PIN, password or thumbprint. It's also important to know how to locate your phone and deactivate it or erase the data remotely using services such as Android Device Manager or Find My iPhone.
How Widely Accepted Are Digital Wallets?
Mobile wallet acceptance is a bit of a catch 22; merchants hesitate to upgrade to contactless point of sale (POS) equipment if their customers aren't yet using it, and many customers aren't yet using it because merchants aren't yet accepting it. However, market research indicates that mobile wallet use and acceptance will continue to grow.
This problem has been somewhat alleviated with the October 1, 2015 EMV regulations that shifted fraud liability to merchants with outdated equipment. As a result, many merchants have updated to EMV-capable equipment, which often includes NFC technology and enables them to accept major mobile wallets like Apple Pay and Android Pay.
Samsung Pay may be the most universally accepted mobile wallet because in addition to using NFC, it also uses magnetic secure transmission (MST) technology that works with most existing magnetic stripe terminals.
Should My Small Business Accept Mobile Wallets?
If you're a small business owner, you may have customers expressing interest in using their digital wallet apps at checkout. The benefit of accepting mobile wallets is that it gives you another channel of accepting payments from your customers, which is worthwhile because you want to make it as easy as possible for your customers to spend money with your business. Accepting electronic wallets may potentially help you attract or at least retain customers, as research indicates that one in four digital wallet users may be willing to switch to a business that accepts mobile wallets. Additionally, some mobile wallet providers, like LevelUp, support loyalty programs and can be leveraged to broaden your marketing efforts by offering perks like coupons or discounts to your customers that use digital wallets to pay at your store.
If you decide to accept digital wallet payments at your brick-and-mortar store as part of your credit card processing and want to accept the most popular mobile wallets, consider the following information about what you need to get started:
- Samsung Pay: Although this mobile wallet is one of the newer options, its advantage is that it may already work with your existing mag-stripe terminal; if it doesn't, you or your processor may just need to update your software. The ease of accepting this mobile wallet without updating your equipment or switching processors puts this wallet app at the top of the list.
- Apple Pay & Android Pay: Market researchers expect to see more than a 200 percent increase in mobile payment transactions this year, and Apple Pay users are especially enthusiastic mobile wallet users. These top wallet apps run on the most popular smartphones, and you can accept both of them by updating your card reader to accept NFC. Because these two wallets are so popular and it's easy to upgrade to accept them, they're among the first you should consider working to accept.
- PayPal: This digital wallet has the largest user base. However, you need to set up a processing account through PayPal in order to accept PayPal payments. If you already have a credit card processor, you want to read your contract to make sure there isn't an exclusivity clause that prohibits you from using a secondary processor. Otherwise, accepting PayPal is a smart move.
- Alipay: This is China's most popular and trusted mobile wallet. If your business is located in a city that's a popular tourist destination, or if your business has an online store and you cater to overseas customers, it may be worthwhile to ask your processor how you can accept this digital wallet for online and in-person purchases.
Whether you're a smartphone user who wants to be able to tap and pay using your phone or a small business owner who wants to be able to make the checkout process as easy as possible, there are several good mobile wallets available to suit your needs.