A cardholder’s guide to paying with your mobile wallet


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Cash, checks, credit cards and debit cards once reigned as the main payment options available. But in recent years, new payment technologies have diversified the field — namely, mobile wallets.

Mobile wallets, often confused with digital wallets, are strictly built for mobile devices like your smartphone.

Mobile wallet technology allows you to pay for goods and services by waving your smartphone (or even your smartwatch) over the merchant’s chip reader instead of reaching into your pocket.

If you’ve never used a mobile wallet before, you might be curious as to how it works and whether or not it’s a better option compared to other payment methods.

We broke out how mobile wallets work, the pros and cons of using a mobile wallet and which mobile wallet might be right for you, below:

How mobile wallets work

Think of a mobile wallet as the virtual version of the wallet you carry with you every day.

Your wallet might include a travel credit card and a no annual fee card, for example; Your mobile wallet includes those two cards as well, but it stores the credit card information virtually.

A mobile wallet can also store coupons, reward cards, gift cards and more. Normally, for security purposes, a password or PIN is required to access the information.

When it comes time to pay, just select a credit card from your digital wallet the same way you’d pull a credit card out of your physical wallet. Many people put the majority of their purchases on the same credit card, which makes mobile wallet payment quick and easy — all you have to do is open the app and hold your smartphone against the payment terminal.

Not to be confused with contactless credit cards, which use the same technology as EMV chip cards, mobile wallets use near-field communication or NFC. This technology enables smartphones to communicate with payment terminals at the point of payment. Typically, the consumer taps or waves the mobile device to allow the payment terminal to access the stored payment credentials.

Mobile wallet versus credit cards

Mobile wallets aren’t so different from plastic credit cards in the sense that both are processed through the same payment networks.

What’s different is that the credit card number, expiration date and other information are stored in a mobile app or chip on the smartphone instead of on a plastic card with a magnetic stripe or chip.

Benefits of a mobile wallet

Mobile wallets use data encryption and tokenization to ensure your bank and credit card account numbers aren’t transmitted when you make a payment. This reduces your risk of becoming a victim of identity theft or credit card fraud.

If your mobile device is stolen, it’ll be difficult for a thief to access your digital wallet without your fingerprint, Face ID or passcode. If your physical wallet is stolen, a thief could start making payments with your credit cards right away.

Making a mobile card payment is often faster than paying with a credit card. Not only do you not have to dig a credit card out of your wallet, but the actual payment process goes by much more quickly.

Some credit cards reward mobile wallet purchases. The Wells Fargo Cash Wise Visa® Card, for example, offers 1.8% cash back for qualified digital wallet purchases on Google Pay™ or Apple Pay® mobile purchases during the first 12 months of card ownership.

Disadvantages of a mobile wallet

  • Not all retailers accept mobile wallets or the specific type of mobile wallet you’re currently using.
  • It might be more difficult to keep track of which credit card you’re paying with. If you’re trying to maximize your credit card rewards by using different cards for different types of purchases, you’ll need to remember to switch between cards in your mobile wallet — otherwise, everything will end up on your default credit card.
  • If your mobile device runs out of battery, you won’t be able to access your mobile wallet or make payments.

Popular mobile wallet options

Here’s a quick overview of some of the top mobile wallets. Follow the links to read our full-length guides and learn which mobile wallet is right for you.

  • Apple Pay®: This mobile wallet lets you use your iPhone, Apple Watch, Mac or iPad to make payments and is accepted nearly everywhere.
  • Google Pay™: Like Apple Pay, Google Pay™ lets you use your laptop or mobile device to make payments both in-person and online. Several payment tools, including Android Pay, have been combined under the Google Pay™ brand.
  • Samsung Pay®: This digital wallet service works with Samsung devices. Plus, it offers rewards on everyday purchases.
  • Chase Pay: Combine your cards, wallets, loyalty programs and more for a one-stop payment option.
  • Popmoney®: This peer-to-peer mobile wallet allows you to transfer money between friends.
  • PayPal OneTouchTM: Make online purchases quickly and easily by connecting with PayPal™.

Pay it safe

If you’re holding off on mobile wallets due to security concerns, be aware that providers are working hard to ensure the safety of their technology. For added protection, here are some security tips to keep in mind when using a mobile wallet:

1. Protect your mobile device with a passcode.

If your smartphone is ever lost or stolen, simply having a strong passcode on your device will add an extra layer of protection.

2. Don’t send personal information over public Wi-Fi.

Many public Wi-Fi networks lack solid encryption or any encryption at all, meaning your personal information is vulnerable to hackers. To protect yourself, avoid making payments or sending any personal information over these networks.

3. Regularly monitor your accounts for fraudulent charges.

Not all theft is obvious. If you see any charges you don’t recognize (no matter how small) in accounts associated with your mobile wallets, contact your issuer right away.

4. Read through your mobile wallet provider’s security overview.

A majority of mobile wallets have security overviews that outline everything the wallet provides to keep your information safe. Take some time to read through this documentation and learn how these services are storing, using and sharing your information.

The bottom line

A mobile wallet may make your life easier, and if you don’t like it, you can always go back to your credit or debit card.

Cash still works fine, too.