More Focus on Digital Wallets as Technology Unfolds

In the very near future, it may be possible for consumers to stop carrying their credit cards around and instead rely on new smartphones to make all the purchases they need.

Given how quickly new technology is now becoming available, it’s very likely that mobile wallets may emerge as a viable and popular payment method within less than a few years, according to a report from the St. Paul Pioneer Press. Many businesses large and small across the country are already adding mobile wallet-compatible payment card readers, which will enable shoppers to pay for gas, meals, and more using only a smartphone.

For instance, many McDonald’s locations nationwide now have tap-to-pay scanners attached to their traditional credit card readers, allowing those with mobile wallets (or, less commonly, microchip-based EMV credit cards) to make purchases without swiping a card the old fashioned way, the report said. Similarly, Starbucks now allows customers with its smartphone app to scan a code displayed by the program to pay using a reloadable account.

How soon can we expect this technology?

While there are currently a small number of devices capable of handling near-field communications-based transactions already, many smartphones and tablets do not yet come with the capability, the report said. However, that may be less of a concern as soon as the next generation of smartphones is released by various manufacturers in the industry. It’s believed that widespread adoption could be less than a few years away.

Some estimates show that the majority of Americans will have embraced mobile wallet and other new payment technologies in full by 2020, the report said. Other, more generous estimates, say that widespread adoption could occur by 2016.

Lots of competition already taking place

The aforementioned Google Wallet system is just one way that consumers may be able to complete the majority of their transactions in the next few years, the report said. Other companies that are developing similar programs may include Microsoft, Visa and MasterCard, PayPal, and Isis (a joint venture between AT&T, T-Mobile and Verizon Wireless, three of the nation’s largest mobile phone service providers).

But despite with all this potential competition in the marketplace, Google Wallet remains the only one currently available nationwide, the report said. Currently, though, the system is largely supported only by major national chains, and not privately-owned small businesses. Complicating matters for the tech giant in its race to gain a foothold in the marketplace before other competitors can even enter it is that the number of NFC-enabled smartphones currently on the market is minimal.

More hurdles exist as well

But a relative paucity of devices capable of completing mobile wallet transactions isn’t the only issue the industry faces, the report said. Because so many competitors are now in the field, the variety of mobile wallet systems available means that not every platform is supported by every, or even most, businesses.

Further, because millions of consumers have been paying with either cash or traditional payment cards for their entire lives, there may not be a general clamor for the new technology, no matter how convenient it is presented to be, the report said. Many consumers have expressed a degree of wariness over the technology’s safety, for example, even though many experts note that mobile wallets are likely far more secure than traditional credit card use.

But it’s likely that both issues will simply be overcome through the passage of time, the report said. Most consider it a foregone conclusion that NFC-enabled smartphones will take over the market in the next few years, and as with previous resistance to new financial technologies (such as online or mobile banking), adoption is expected to happen somewhat slowly at first, but then become pervasive in a relatively short period of time.

This will likely be especially true as more businesses become involved, and allow consumers to more efficiently link accounts and offers, the report said. For instance, if companies begin allowing consumers to start saving their store loyalty accounts, coupons, gift cards and more onto mobile wallets, that might incentivize adoption among many shoppers.

But just because mobile wallets are more secure than traditional card use does not mean that your vigilance can be allowed to decline where your finances are concerned. It’s also vitally important that you take the time to both order and carefully examine your credit report. Doing so may allow you to identify any potentially unfair markings on the document, which may be taking a toll on your overall credit standing. Fortunately, working with a credit repair law firm will likely be able to help you correct the mistake and return your credit score to where it should be.

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