If you've paid for a coffee with your mobile device, you’re not alone. Technology continues to touch every facet of our lives, and mobile payment is a catalyst changing the way we pay for goods and services.
Mobile payment allows you to pay for things and send money using your mobile device by linking to a physical credit card, debit card, or bank account. With mobile payment, you enjoy the same security that you may have with a physical card, and sometimes more.
As we seek contactless ways to pay to avoid handling cash, cards or checks, it's a good time to understand all the ways you can make convenient mobile payments safely.
Types of mobile payment
Depending on what type of mobile device you have, there are several kinds of mobile payment:
- Mobile payment apps such as Apple Pay or Samsung Pay can be used in person at many different brick-and-mortar stores.
- Merchant-branded apps can be used to pay at their stores, such as Starbucks and Walmart Pay.
- Apps developed for transportation authorities such as Amtrak, Metro North, and Long Island Railroad, which allow you to purchase tickets on your device.
- Digital wallets, which you can link to your credit card, debit card and other account information from your device can be used to make transactions with businesses, financial institutions, and individuals. Examples include PayPal, Apple Wallet, Venmo, Zelle, and Amazon Pay.
Limits on mobile payments
New apps and systems are being developed every day, but there’s no single system that works everywhere, on every device. Some mobile devices don’t support mobile payments at all. Some mobile payment systems allow you to make a purchase with your mobile device at a credit card terminal, just as you would with a traditional credit or debit card. Other systems use barcode scanning. It's important to keep the following in mind:
- Since mobile payment is a newer technology, not all stores are equipped to accept mobile payments. It's a good idea to be ready with other payment options, such as a physical debit or credit card.
- Paying with a mobile device usually costs the same as paying with a credit or debit card, but it's a good idea to check your mobile plan and your linked card or bank account for any additional fees or limits on transaction amounts.
- Monitor your mobile payment transactions just as you would a traditional payment on your statements, and contact your credit card issuer, bank, or financial institution if you have any questions or concerns.
Keeping mobile payments safe
Shopping and paying with your mobile device can be incredibly convenient and extremely safe when you take the right precautions to protect yourself. It's a good idea to follow these tips by the Consumer Finance Protection Bureau (CFPB):
Use mobile payment services only with people you know and trust
Cyber thieves try to steal by requesting you to send them money or for you to buy non-existent goods or services—everything from sports tickets to loans—using a mobile payment service. Sometimes they purchase an item from you and then cancel what appears to be a payment.
TIP: When sending money to someone for the first time, ask them to send a request from the payment app, if available. If this isn’t available, send a small amount to make sure it’s getting to the right person. It's worth taking this extra step to make sure you're sending the correct amount to the right person.
Be aware of timing
When receiving money by mobile payment, you may not have immediate access to the funds. Depending on the mobile app and the person sending you money, it may take a few days to process even if the money immediately “appears” in your account.
Some services allow you to transfer money directly into your bank account but will charge a fee for faster access to it, so know the rules.
When it comes to sending (or spending) money with a mobile app, your payment is almost always immediately deducted from your balance. Unlike checks or credit card purchases, mobile payment apps typically don’t allow you to stop or hold payment. All the more reason to make sure your transaction details are correct before you hit “send.”
Use extra authentication
Most devices and apps offer added authentication preferences such as requiring a passcode, PIN, or fingerprint before you finalize a payment. It’s an extra layer of security to prevent anyone who gets hold of your mobile device from making transactions.
If you’re suspicious, contact your bank or payment provider
Whether you think you see a mistake or something suspicious, notify your financial institution right away. Federal law requires financial institutions to investigate errors.
Depending on the type of mobile payment used, getting your money back may not be a simple matter. So make sure you know what protections are offered by your mobile payment provider.
Remember, your mobile device is a computer
Using your mobile device to make payments and access your bank accounts is just like using your laptop or desktop computer—the same online safety practices apply.
Only use secure websites, apps, and hardware
- Make transactions only through reputable, secure company websites (URLs starting with https://).
- Don’t make transactions through a link you’ve been emailed or texted unsolicited—it could be fraudulent.
- Avoid making mobile payments thorugh public Wi-Fi. Use mobile payments only through through a private network with a password, or from home.
Protect your personal information
- Don’t save your passwords on your mobile device. Use strong passwords that aren’t obvious or easily hacked.
- Never share your PIN or passwords with anyone.
- Only download trustworthy apps.
- Sign out and close your browser or app when you’re done. To be extra safe, clear your browser history.