A guide to mobile payments
Quick insights
- Mobile payments are electronic transactions made using a mobile device, typically through a payment app.
- Many smartphones and smartwatches have contactless payment technology that allows you to make mobile payments in stores.
- Mobile payments might be a helpful option if you prefer not to carry a wallet or manually enter payment information online.
With a quick tap, you can use your phone to pay for goods and services. To make mobile payments online or in stores, you’ll need a payment app—there’s one likely already installed on your phone—linked to your debit or credit card. Smartwatches and tablets may also offer this capability.
Mobile payment apps generally include security features to help protect your financial information and are designed to help streamline the payment process. In our guide to mobile payments, we’ll cover some things to know about mobile payments, including how they work, potential benefits and whether they could be a useful payment option for you.
What is a mobile payment?
A mobile payment is a digital transaction made using an internet-enabled mobile device, such as a smartphone, smartwatch or tablet. These payments are often facilitated through payment apps, like mobile wallets, which are digital wallets designed specifically for mobile use.
Mobile wallets generally support digital payments both in stores and online. Some examples of these payment apps include Apple Pay®, Google Pay™ and Samsung Pay®.
These payment apps allow you to store your debit or credit card information, as well as coupons, event tickets and boarding passes.
How mobile payments work
To pay with your phone, use the payment app pre-installed on your phone or download your preferred app. Then, link your payment method to the app. With mobile payments, you don’t need to present a physical debit or credit card in stores or manually enter your card information online.
To make a mobile payment in a store:
- Hold the back of your phone near the card reader.
- Follow the prompts to complete the transaction.
Your phone uses contactless payment technology to transmit your card information to the merchant. (Smartwatches often have this technology too, but many tablets do not.)
For online mobile payments:
- Select the mobile wallet as your payment method (if available) at checkout.
- Follow any steps to authenticate the transaction.
When you make a mobile payment, you’re still using a card to pay, but the information is in a different form than if you paid with the card itself.
Benefits of mobile payments
Here are some potential benefits of using mobile payments:
- Efficiency: Mobile payments are designed to streamline the payment process, which might be useful for when you’re waiting in long lines at the grocery store or coffee shop.
- Cleanliness: There’s usually less need to touch PIN pads, credit cards or other surfaces that could harbor germs.
- Security features: Mobile payment apps typically use tokenization to help protect your financial information. Mobile devices may offer additional security features like biometric security.
- Rewards: When using a rewards credit card for mobile payments, you’ll still earn rewards for qualifying purchases, just as you would when paying with the physical card.
When to consider using mobile payment methods
You may want to consider using mobile payment methods if you:
- Want an alternative payment method in case you forget your wallet or prefer not to carry it.
- Prefer not to enter your payment information manually every time you make an online purchase on your mobile device.
- Are familiar with the security features of the mobile payment app.
In summary
Mobile payments are digital transactions made using a mobile device, such as a smartphone, smartwatch or tablet. These payments can be facilitated by payment apps linked to your debit or credit card. You can use mobile payments to purchase items online, and if your mobile device has contactless payment technology enabled, you can also make payments in stores.
Potential benefits include an efficient payment process, reduced need to touch surfaces that may carry germs and security features to help protect your information.
