Things To Consider Before You Decide To Get An Electronic Wallet

It seems like everything is going digital.  Now, even your wallet will be digital.  Yes, you read that correctly: now you will have a digital wallet.  In the United States mobile wallets are not as popular as they are in other countries.  Many people expect these applications to become popular by 2015.  Although they are popular in other countries, it is still important to consider the advantages and disadvantages of using them.

Mobile wallets have the same potential issues as other digital methods of payment.  Some of the Mobile Walletsconcerns include security, availability, and reliability.

Security Risk: One of the biggest problems with mobile wallets is the security risk of using a mobile phone as a source of payment.  What happens if you misplace or lose your phone?  What happens if your phone is stolen?  All of your personal information is available for use by someone else.  I have not had the opportunity to use these wallets but I am concerned that the wallets might send too much information.  Also, with a credit card, the merchant is at least expected to check to make sure that you are the person that you claim to be.  However, with a smartphone, there is no real way to check to make sure that it is your phone. 

Availability:  Right now it seems that there is a turf war over the use of mobile wallets.  Each big company seems to have their own way of using the mobile wallet.  If you have cards by multiple card issuers you might have to use multiple wallet applications.  This could become inconvenient and very confusing.    

Reliability:  How do you make sure that the application is going to work at the right time?  What if your phone doesn’t get a signal in a store?  Then you are forced to look for a different form of payment.  It would also concern me if there were a problem with the servers that run the program.  At this present time there is not a way to make sure that smartphones have the ability to connect to a network irrespective of their location.

Specifications: Another potential problem is the fact that using a mobile wallet will need certain software.  Basically your phone must be built with certain specifications to use the software that is being used.  While some manufacturers are busy making phones with these specifications, it still requires you to buy a new phone to get the benefits of the wallet.

Consistent Leak of Personal Information: It might just be me but I don’t like the idea of releasing personal information.  If you use a mobile wallet, you have to assume that the information is being collected and relayed to other parties (especially if you are getting individualized discounts).  This of course could lead to more junk mail and advertisements.

Potential Charge For Doing It the Old Way: Whenever technology advances, the old method becomes more costly.  I am a fan of the paperless movement but I can’t help thinking about those elderly people that do not use computers .  Now they have to pay more money to use paper.  Likewise, the same thing could happen if mobile wallets become popular.  Those that use physical credit cards might have to pay a price to use them.

Spending More Money: Studies have shown that when you swipe a credit card you get a sense of pleasure from using it.  However psychology shows when you use cash you register a painful feeling.  This is the reason that most financial advisers will tell you to use cash if you are trying to spend less money.  Well, if you don’t even have to take out your credit card to charge something, I think you would spend more money.  This could become problematic for those that do not know how to follow a budget. 

Now that we discussed the disadvantages of mobile apps it is time to answer the most important question: What is so great about a mobile wallet? 

Space Saver: Well, for the technology savvy person, it is will give a great way to minimize the amount of things that you carry.  If you are like me, you value things that will allow you to save space.  At least you won’t have to worry about losing your credit card.    

Potential Reduction of Chances For Identity Theft: If you watch those television specials, you know that sometimes handing your card over to a waiter, waitress, or store clerk could be dangerous.  Apparently, it is pretty easy to copy a credit card.  So, if you use a mobile wallet, you could decrease the chances of that occurring.  Plus, using your mobile phone may send less personal information if the program is built correctly.

More Savings: The companies that use mobile wallets intend to use them to give coupons to their customers.  It is similar to the way that discounts are tied to your physical card.  Basically when you use your mobile wallet you will automatically get a discount.  Allegedly, you cut the need for coupons.  Additionally, if it becomes popular programs might spring up like Groupon that are integrated into your mobile wallet.

Individualized Savings: This is probably one of the things that is most promoted about the cards. If the credit card companies see that you are buying certain products, you might start getting rewards or discounts based on your shopping history.  Some credit card companies collaborate with businesses to give benefits when their customers use their cards.  This would make it easier to get those benefits.

Efficiency:  I love when things are efficient.  You can’t always predict the amount of time that it will take a merchant to run your credit card or if their system will be down.  If you have a mobile wallet, you can make sure that you can pay with your type of card based on the app. 

Easier organization: With a mobile application you would be able to have a copy of all of your transactions on your phone without having to keep multiple pieces of paper.