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Pros and Cons of Mobile Payments

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August 30, 2017

For years, experts have predicted that smartphones would replace our wallets. And while we still have a way to go before credit cards are obsolete, there's no mistaking the ongoing shift to digital forms of payment. If you're considering joining the trend, make sure you know what you're doing to ensure you keep your identity and credit score safe.

How do mobile payments work?

Mobile payment services work as a digital method of purchasing that doesn't require you to present a card or cash. Just link your card or bank account to the service, and then use your phone to make purchases in stores, online and within other apps. Some types even allow you to send funds to email addresses or mobile phone numbers.

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What are my options?

With newer phones, you can use Apple Pay, Samsung Pay or Android Pay. Banks such as Chase and retailers like Target, Walmart and CVS also have apps. And there are popular upstarts like Venmo that let you transfer payments among friends. These services are widely accepted, as retailers see them as a way to boost their bottom lines.

What are the pros and cons?

Mobile payments are about convenience, reducing your time at checkout and minimizing the need for entering credit card numbers each time you shop online. But security remains the biggest concern, which is why major services have put critical protections in place. Rather than store card data on your phone, for instance, many use digital tokens to process payments and avoid exposing sensitive information. And you can take steps to protect your data by managing your passwords, keeping up with software updates and setting your app to require fingerprint verifications.

While mobile payments aren't yet mainstream, they just might become your preferred way to pay for goods and services once you give them a try.

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