5 Reasons To Be Anti-Mobile-Wallet

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Mobile wallet

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While many people are getting caught up in the development of mobile wallets, it is important to look at what the adverse side effects could be if they were to become the standard form of payment, at least in the United States.

The current state of the economy has led many to think that this is the beginning of the end of cash in the United States. Fortune magazine, for example, featured a story that equated the mobile wallet and digital payments movement with the same transformation that occurred in the 1950s with the invention of the credit card.

Of course, this is not, exactly, the whole truth. Many people feared that credit cards would destroy the cash system; while it did lead to more widespread use of the far more convenient credit/debit system, cash is still around, and in many markets it is still king. That doesn’t mean that credit cards are bad or that they do not belong. On the contrary, credit has its place and it seems that mobile wallets will have their place as well. Still, there is concern that their benefits may not be what most have expected.

For example, mobile wallets will compete with credit and debit cards and not cash. Credit cards transformed the financial system for Americans because it was something that could be used in place of cash; the mobile wallet does not offer this. Rather, the mobile wallet is a tool that makes it easier and more secure to use your credit card. This does not necessarily change the fabric of the personal finance industry. Even the industry leader—for the time being—Google, with their Google Wallet application, is not doing much to win over consumers and experts alike.

Secondly, a recent study by Lookout Labs shows that Americans lose, on average, one cell phone every year. This means, essentially, that if the American economy were to rely solely (or at least, and perhaps more realistic, heavily) on mobile wallets like Google Wallet, they would have to deal with also losing their credit cards at least once a year. Of course, many people also deal with losing their wallet or having their wallets stolen, which could compound to a financial mess that many would likely rather avoid. While cancelling and replacing your credit cards is pretty easy and basically free, replacing your phone – with all of your vital information stored inside – could not only be inconvenient but could be potentially damaging in the grander scheme of things.

Social exploration applications and social media-based payment systems have proven that people will belong to these networks when offered a discount from local businesses. This is also some of the appeal of the mobile wallet. Unfortunately not every business has the kind of capital or other resources available to offer discounts or other premiums.

Bluetooth, wi-fi, and NFC-technology have made FTP much simpler. They have also increased the necessity for better fundamental security measures. While this means that your personal information may be better protected, storing all of your information in your phone could make it easier for other people to acquire information that is less sensitive but equally personal. For example, you can borrow money from a friend or conduct a transaction through a mobile wallet. This transfer of money is trackable through both of your phones, which means that if, at any time, this other person were to be up for “investigation” of any kind, it would show that they dealt with you. That’s not appealing in any way.

Finally, the payment infrastructure is already strong in the United States so the most important aspect of the mobile wallet is industry is weighing the benefits with the risks. For the US, there are definitely more risks than benefits. In underdeveloped countries, like Kenya, however, where there is no currency (not really) the mobile wallet, literally, saves lives. Thus, it just doesn’t seem sensible for the entire population of the United States to attempt such a monumental change; at least not for now.

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About Author

Casey is a seasoned writer in personal finance. He has written a number of articles that have been published in magazines and blogs around the country. His advice has helped millions make better choices about how they save their money.

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Advertiser Disclosure

CREDIT DAD is an independent, advertising-supported website. Many debit cards, credit cards and other financial offers that appear here are from companies from which CREDIT DAD Websites receive compensation. This compensation may impact how and where products appear on this website (including, for example, the order in which they appear). CREDIT DAD Websites do not include all card offers in the marketplace.