Mobile payment systems offer the ease of paying online with the click of a button or in-store with the swipe of a phone. While it’s still early days for making payments via our mobiles, global financial institutions such as MasterCard and Visa, as well as technology giants Google and Microsoft, are lining up to grab their stake in your mobile wallet of the future.
Mobile wallet systems
The Windows Phone 8 Wallet hub will store credit and debit card details for making purchases, as well as coupons, deals and loyalty card details, and will support NFC for contactless payments in shops and in-phone money transfers using registered banking systems. Currently, there are no Australian retailers using it.
Apple introduced the Passbook app with iOS 6. Designed to store details about shop loyalty cards, coupons and airline boarding passes, as well as cinema and concert tickets, it uses location and time data to link with saved tickets. It can’t be used for payments because the iPhone doesn’t have NFC.
Google Wallet is an online and smartphone-based payment system using NFC that can store credit and debit cards, coupons and offers as well as loyalty card details for shopping and claiming offers. Websites will display a Buy with Google button in order for you to pay with accounts held in your Google Wallet.The Google Wallet app can be used with smartphones running the Android operating system to pay for things with credit or debit cards that have been stored in the Google Wallet.
MasterCard PayPass Wallet stores credit and debit card details for a number of financial institutions for shopping online and using mobile devices.
PayPal has teamed up with Discover, a banking and payment services business that allows merchants in-store and online to take PayPal payments from shoppers via PayPal. There are currently no plans to extend this deal to Australia.
SmartPass is an app developed by Vodafone for phones using NFC and is expected to be in use here later this year.
V.me by Visa stores your Visa and other credit card details so you can pay with an email address and password on websites.
Isis Mobile Wallet is a smartphone app that stores payment cards and coupons for payments via a smartphone using NFC.
Square Wallet is a smartphone payment app similar to Isis.
Merchant Customer Exchange (MCX) is in development and will be a smartphone app for payments at stores that are part of the MCX network.
What is NFC?
Near field communication technology allows wireless communication between devices within close proximity. Devices transmitting information using NFC encrypt that information and use a secure channel to send the data. Payment terminals and checkouts usually show the universal contactless payment symbol when they can process payments with NFC via a phone or tablet. You hold the device near the terminal and the financial details stored in the e-wallet app on the phone or your card are sent to the terminal via NFC to make the payment. Unlike Bluetooth and Wi-Fi, which rely on radio transmission, NFC uses electromagnetic radio fields and passive tags that emit information. Active devices, such as NFC-enabled smartphones, can both read information from tags and send information to other active devices.
Mobile payment systems are convenient but come with inherent security risks. Some of the digital payment systems being developed have limited availability in Australia right now. If consumers take to mobile payments as predicted, their choice of payment system is likely to come down to what is available on their phone’s operating system and what system their bank or financial institution offers.
- There are security risks, as the system involves financial details being stored online or transmitted wirelessly.
- There’s a risk of accounts being hacked, and financial information being stolen or funds lost.
- If many of your banking and credit card details are stored by Google or another group, you have to trust that they’re secure.
- If the details are stored in a mobile phone app, then as with your physical wallet you need to be very careful about the whereabouts of your phone and contact all providers if it’s ever stolen.
- There are also privacy considerations, as people lodge personal information along with banking details within smartphone apps, and those apps will contain a record of all purchases and other transactions made with the account.
- The data will need to be well managed to maintain people’s privacy.