Guide To Understanding Smartphone Payment Options


ADVERTISING DISCLOSURE: is an independent, advertising-supported web site. receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Cardholder Benefits » Guide To Understanding Smartphone Payment Options

Guide To Understanding Smartphone Payment Options

The content is accurate at the time of publication and is subject to change.
As a parade of new mobile phone applications that allow you to pay with your credit card or debit card account with a flick of the wrist or the tap of a screen – you may be wondering if mobile payments are safe and easy for you to use. Smart phone sales have jumped 75% since last year, and according to a 2011 Pew Report, of the 83% of American adults that own a cell phone, only 35% of them own a smart phone. Mobile payments accounted for $3 billion in sales in 2010, according to Forrester Research. This guide outlines the latest technology and the pros and cons of mobile payment systems. How it works: Most credit card apps are still just that applications on your phone that you have to open and activate in order to use. Once you have turned on your phone and opened the app you can wirelessly transmit your credit card data to the merchant’s reader. Apple is developing technology it call’s “wave and pay” that would only need to be exposed to a wireless transmitter on your phone. This technology is still be developed and would always still require some kind of confirmation or agreement to pay from the credit card holder. Businesses in the space Apple Inc. introduced EasyPay, an app that enables Apple Store customers to buy products with an iPhone by using its camera as a bar code scanner. LevelUp, a service launched by social media gaming start-up SCVNGR, gives smartphone users individualized Quick Response codes for merchants to scan. LevelUp can be used at more than 180 places in the Boston area. ROAM Data Inc., a Boston start-up that makes encrypted credit card readers that attach to smartphones or tablets and software, supports mobile commerce. AisleBuyer also lets customers make in-store purchases with an Android or iPhone while shopping. Square, a San Francisco company grew its business by giving customers free card readers and charging merchants 2.75 percent per swipe. In some cases this is a much lowere start up cost than installing a traditional credit card machine. Square processes the transaction and deposits the money into the merchant’s bank account. Pro: So many people carry lots of important data on their smartphones. The ability to pay with a phone would offer one more option for merchants and it would make it fast and easy for people to pay without taking out a wallet and exposing the number on their card to anyone who might be looking to steal the number. Con: Your data can be retrieved off of a lost cell phone. In order to use a mobile app, you must enter in credit card numbers and security passwords on your phone. Similar to mobile baking, this adat is then saved in the hardware of your phone so each time the app is used the phone can access your private information. A programmer would be able to hack into your phone if it was stolen or lost and retrieve your name, credit card numbers, expiration dates and other valuable information. But something similar will follow them: the chip-embedded, radio-frequency-secured credit and debit cards that Europeans have used for years.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Posted: November 8, 2018

Thanksgiving is coming, and whether you are hosting a meal or coming as a guest, your spendings are going to accumulate faster than you can notice. A holiday feast is a costly matter – each year Americans spend around $50 on a Thanksgiving ... Continue reading
The Best Credit Card for Earning Cash: Discover it® Cash Back

The Best Credit Card for Earning Cash: Discover it® Cash Back

Posted: November 2, 2018

You’ll have hundreds of dollars in your pocket in no time because you’ll earn money back on every purchase you make with this card. There are no restrictions on the amount of cash back you can get, and Discover even matches every penny you ... Continue reading
Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Posted: October 10, 2018

Nights are drawing out, the wind is colder every day and you already feel the lightest breath of winter on your face - autumn is here. Holidays are over, kids are back to school and all you are left with are hefty holiday bills that you ... Continue reading
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!