The following is a guest post on Mobile Payment Technology and how can you use it for saving money.
Mobile payment technology offers an alternative to a cash or credit card transaction at stores and even some restaurants, such as Starbucks. It simply means you pay using an app on your smartphone rather than with cash or a credit card.
Some applications are put out by the retailers themselves, such as the Starbucks app, while others like Google Wallet, are created by non-retail companies that collaborate with banks or credit card companies.
These payment types will continue to gain market share over the coming months and represent a real shift in what has been either a cash or credit card processing dominated world.
The Differences Between Store Apps And Apps Like LevelUp And Google Wallet
Stores typically put out their own applications in order to encourage you to purchase from them. Often they will feature special incentives like coupons or discount days, or they will track the amount of dollars you spend or number of items you purchase, such as beverages at a coffee shop or books at a bookstore.
When you reach a certain number, you get something for free. This is basically a digital version of the old paper card loyalty programs, where you would get a punch on your card for dollars spent or items bought.
Apps like LevelUp and Google Wallet operate differently. Google Wallet offers something more along the lines of turning your phone into a wallet full of your credit and debit cards. It creates a digital way to access your bank or credit card account.
The way it works is that you load your account information into an application on your phone, and then when you make a purchase, you use the phone application rather than your card.
The application works just like a wallet and lets you store multiple cards and accounts in one application. Google Wallet also stores retailer rewards cards and Google Offers, which are special coupons similar to Groupon and LivingSocial, which give deep discounts on products and services in your area. LevelUp works in much the same way. Like Google Wallet, it offers its customers a way to store all their card and account information digitally in one application.
With LevelUp, you also receive instant credits back, anywhere from 2 to 20 dollars, when you try shopping at certain new places or when you become a frequent customer somewhere. The credits are offered by the merchant in an effort to build customer loyalty. Participating stores have a special LevelUp pad where they scan the account or card information on your phone, encoded as a QR code.
How This Can Save You Money?
There is no question that using any or all of these mobile payment technologies can save you money. Just like the old loyalty cards, applications put out by stores still reward you with free merchandise. But now, in addition, you can receive coupons and special discounts by using their application. Because the app works right on your phone, you get notifications of special deals right away, decreasing the likelihood that a deal you have been waiting for will pass you by.
If you use Google Wallet, it can often integrate a store’s reward card right into the Google Wallet app, thereby eliminating the need to access multiple applications and expediting the payment process. Additionally, because it also integrates Google Offers, Google Wallet lets you access and be reminded about special half price deals that you may otherwise forget or miss out on. With LevelUp, you actually get real money credited back to you when you make purchases at participating merchants.
Besides the obvious benefit of saving money when you make purchases, using mobile payment apps offers other benefits as well. With your cards and accounts conveniently stored in one application, you no longer need to bring your wallet with you to participating stores. Also, by using rewards card apps on your phone, you eliminate the need to carry around multiple cards on your key chain or in your wallet. And with apps like Google Wallet and LevelUp, if your actual wallet or your phone is stolen, you can access your account online and disable the app instantly
While many individuals are nervous about the potential privacy concerns around these new payment types, early adopters will benefit from the competition and offers that these services will be rolling out as they attempt to gain market share. Similar to the boom in social networks, consumers will likely begin to gravitate towards these new payment options as they become more comfortable with the security measures involved and the benefits these services offer.
I recommend that you keep your eyes out for offers from ISIS, Google, and smaller players such as LevelUp in your local markets to try and take advantage of these new payment alternatives.
About the Author James Brady is a featured author at CreditCardProcessingAdvice.
Edward Antrobus says
I can understand how paying from a phone app would make things easier, but the ways listed for saving money already exist. I already have loyalty cards for the places I shop the most right on my keychain. Many of them email me coupons that I print out. And my debit card is always in my wallet.
Besides, I forget my phone FAR more often than my wallet or keys.
in that case this new technology is not for you my friend.
James Brady says
The difference is that these new technologies would represent a merger of those options and ideally allow you to more easily leverage them. Now rather than use a loyalty card and get sent coupons, when you use your phone it will automatically apply discounts. Also from a time and convenience perspective, rather than pay with your debit card, hand the cashier a coupon and have them scan your loyalty card, it will all happen in one simultaneous transaction with a single device.
Ornella @ Moneylicious says
I don’t use my phone as a digital wallet, but I can see how this could be useful for other people who are connected to their phone. What happens if you lose your phone? How safe is the financial information you store in the apps?
Yeah still your information remains secured. If you have banking apps on your smart phone, the risk for you is the same. everything is password protected.But if you lose your digital wallet, you need to change your accounts, the thing as loosing your physical wallet.
Darwin's Money says
If it were truly saving me money, I’d switch to this technology but I’m skeptical at this point. For instance, I have plenty of store cards that are meant to save me money but don’t. Take the Panera card for instance. I get a mocha and a pastry once in a while when I’m on the road. The only thing I “earn” each month is a free bagel. I don’t want a bagel, so I never redeem it. Would these mobile payments be any different? At least with a cash-back credit card, I get 1%-5% back automatically depending on the category.
Still its a nascent technology, I would wait for a couple of years for it to mature and become more rewarding.
James Brady says
Darwin, the interesting thing is that we are approaching a pivot point for the industry where very quickly there are going to be a lot of options, and just as I’m sure you chose between credit cards to find the one that would give you the most rewards points, you’ll be able to choose from a variety of options and choose the one that works best for you.
Miss T @ Prairie Eco-Thrifter says
I really hope this takes off because I like to have to carry as little as possible around. I like to travel light. I already use my phone for everything else so using it to pay makes sense to me.
this will take off and fall within our lifetime. A day may come when all you need to pay is your finger print on a device at stores.