Tech Updates

Can a Phone Replace Your Wallet?

Can a Phone Replace Your Wallet

At the end of 2015, you will probably be answering the question whether your phone can replace your wallet. You’d be saying “Actually, it already has”. However, it may be possible you are still unfamiliar with the concept of a mobile wallet altogether. No harm; let me explain!

Can a Phone Replace Your Wallet

Image Courtesy – Fractal Analytics Blog

Can a Phone Replace Your Wallet?

The world has changed. In this age of strong competition and e-commerce have brought forth this new technology that lets you make transactions through a very personal gadget of yours, your cellular phones! Simply by waving your smart phone close to the NFC reader at the checkout counter you can spend your money any way you like. In layman terms, mobile wallets allow you to make safe and simple transactions through your cellular device.

The Digital Wallet

Now what does the digital wallet provide you? For one thing, it means that you will always be able to choose from various payment methods to make payments. If you are completely unfamiliar with the concept, I’ll put it this way, its money moved via your phone. So, you will only need to establish an online account that contains your bank details; and link it with your NFC enabled smart phone and you are ready to roll! Your phone is now your money carrier.

The app on your smartphone is connected to your bank account.  This application is assimilated with the banking app; therefore only the customer and his bank know about the account details. Many people are already calling it the future of money and the third era of monetary transactions after cheque and cards respectively.

Why the Mobile Wallet?

The latest model of payment is quickly gaining popularity, with steep growth rate of 37%. A major factor is the NFC enabled iPhone 6 which was launched recently; Apple being a major tech company will boost mobile wallets. However, the best part is; you can make mobile payments, e payments and various other transactions through your phone. Allow me to make my case stronger by explaining the things that mobile payments have over other methods:

1. They are the last word in Payment systems

If you don’t know how popular mobile wallets are, study the graph below which show that mobile payment volume will reach $214 billion by 2015. Moreover, starting from almost zero in the year 2013, NFC based payments are predicted to hit $22 billion.

NFC Payment Trends

2. Security

Mobile based transactions have proven to be safer than cash or cards. This is because mobile payments have a multi layered security system. You can see this in the descriptive diagram below. A complex web is formed which makes security of payments virtually fool-proof.

NFC Mobile Payment Process

3. No Illegal Entry

No unauthorized personnel will be able to gain access and use the NFC chip in your phone. There are various processes of verification which ensure that only the real user is able to make payments from the phone. Thus, even of the hacker reaches the NFC chip he will not be able to use your money. The rest of the phone is safe anyhow, because any other data is not linked to the NFC chip.

4. Better Management

Now this is particularly cool. Not only does it keep your credit secure and allows money to flow from you to the merchant but NFC apps allows you to keep track of your own purchase history and patterns. You can then manage and plan out your expenditure better.

5. Know what’s near you

It can really be convenient to know about the best offers, products and prices in and around the area you are in.  With mobile payments this is possible. You can check out all that is up for grabs in the stores of your locality, and trust me you’d want to know all you can before you enter a store.

6. Cloud based systems

The advancement of technology is leading to the transition of businesses to cloud based systems. With this, the network of mobile payments will become expansive and enhanced. This will lead to better and more smooth services.

Also Check: All You Need to Know About Cloud Computing/Hosting

7. Convenience of use will push NFC Adoption

The number of smartphone users is growing briskly, and more phones mean greater potential for mobile wallets. The advantages of mobile wallets coupled with the increasing number of phones means that the future of payments lies in the mobile.

8. Being a merchant

If you know how your customers spend their money and what they prefer, they will become easy to target for your business. NFC lets you do that! With data of purchases being updated continuously you will be able to not only to target customers but also to gain their loyalty.

9. Comfort of usage

Although the structure is pretty complex, NFC apps are extremely easy to use. The straightforwardness of procedure is a particularly good feature since it gives a whole new edge to the system over paper or plastic money.

10. No keys required

Ever lost your keys? Ever been locked out of your office or house? Not anymore. Your phone will not only be your wallet but also your key. You can wave it near the lock and it will be unlocked, the NFC chip will serve as a proof of your identity.

So what next?

What next? Leather wallets will be out of the picture. NFC enabled phones provide complete features of your wallet and more. You can have loyalty and saving vouchers all in your app, and they are one click away whenever you need them. Just remember to take your phone with you when going out to shop.

This is a guest post by Umar Jamshed. Umar Jamshed is an IT expert and a former consultant with The World Bank. He is a graduate of Curtin University, Australia. He works for Boloro which is a mobile payment network.

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