A decade or so ago we watched movies where heroes simply tapped their mobile phone (or other impressive wireless gadget) onto a device and something amazing would happen. Back then we would never have imagined that it would be possible to simply tap your mobile phone to make a payment in a restaurant or shop.
But technology is evolving faster than we are, and mobile wallets are changing the way we make payments and deal with money.
Mobile wallets are still very much in its early stages, and although many people are using it, not all the wrinkles have been ironed out yet and the majority of people haven’t climbed on board. The big problem at the moment is that each mobile wallet platform works differently and the application hasn’t been standardized.
Looking in more detail at what a mobile wallet is and how it works will give you a better understanding of the concept and help you decide whether you want to try it out yourself.
What is a mobile wallet?
A mobile wallet is the digital version of your physical wallet. It contains digitized valuables that you would normally find in the form of cards. These include credit cards, gift cards, loyalty cards, coupons, train tickets and boarding passes.
The idea is that they’re all in one place and easy to access so that you’re not rummaging around your wallet every time you do business.
How does a mobile wallet work?
Mobile wallets are useful in two areas of your life: When you’re out and about and when you’re stationed somewhere and you’re doing online transactions.
Say it’s morning and you’re rushing out the door to get to work. You stop at a coffee shop on the way to get your morning fix and a bagel. Instead of swiping a credit card and entering a pin or dealing with lose change; you simple tap your phone against an acceptance terminal to make payment. The terminal connects to your phone on which your banking information is stored and draws the money.
From here, you buy a train ticket online while you walk to the station. No need to fill in your credit card details to buy the ticket, as there’s a button that allows you to pay using your mobile wallet. Only a password it needed.
Your train ticket is also saved on your mobile wallet, so when you get to the station, you display that to get on the train. The same goes for an airport. Mobile wallets allow you to store your boarding pass after checking in online the night before and you can also display it, or in some cases, tap it on a device in the airport.
Mobile wallets also let you store coupons, loyalty cards and the like as well, so you can claim your discount or your points in the process of making online payments. It also makes for easier international money transfers, as your finances are summarized in one space and you can make payment with the tap of a button.
Challenges with mobile wallets
At the moment, each mobile wallet provider needs to set up a list of service providers and partnerships. Since the market is still new, there aren’t standard processes yet and not all businesses across the board have the facilities to accept mobile wallets.
This tends to discourage users of mobile wallets, as theirs is only accepted in some places and at certain online shops. Once it’s possible for a range of different mobile wallets to be accepted widely, people should start adopting the technology more readily.
Is it worth using a mobile wallet?
If you enjoy adopting new technologies in its early stages, then it’s definitely worth using a mobile wallet. In the USA especially, many service providers have already implemented the technology. Even if you don’t use it in every part of your daily life, it could simply be an easier way to keep track of your train tickets or to make transfers online.
Once the processes and strategies have been standardized across the board, mobile wallets should take off more visibly and globally. It could make for more space in your handbag or your pockets!