Mobile Payment Technology: What’s in Your Digital Wallet?

Commerce is becoming contactless

When was the last time you cleaned out your wallet? How many used ticket stubs, old receipts, and dentist appointment reminders did you find? The wallet is more than just a place to carry cash and cards; it’s a catch-all for life’s dull miscellany. If you long for a more streamlined existence, consider trading in your actual wallet for a virtual one, because mobile payment technology is driving commerce fast.

This has been a healthy year for mobile payment technology, and it’s projected to grow. The combined market for all types of mobile payments is expected to exceed $1 trillion by 2019. That’s a lot of digital coinage.

How will digital wallets change the way you purchase goods and services? One thing’s for sure, you’ll no longer need a murse to carry the accouterments of modern life. If major mobile payment players have their way, your smartphone will be all you need to buy another smartphone.

The world of mobile payments

Mobile payments include numerous types of transactions, but let’s focus on mobile at the point of sale (POS). The idea is that these digital wallets, in cahoots with near-field communications (NFC), a short-range wireless technology that allows you to pay for goods by swiping a device, will replace the physical billfold or pocketbook.

Many predict that an avalanche of smartphones– expected to exceed 2.5 billion users by 2019– will encourage widespread adoption of mobile POS payments by retailers and consumers. It’s a big, big world out there for mobile payment madness, and we’re just getting started.

The down-low on digital wallets

While NFC technology isn’t the only way to utilize mobile payments (you use this platform when you purchase a ringtone from your phone), if you want to use Google Wallet, Google Pay, Apple Pay, Samsung Pay or the like, for example, you need a device with a NFC chip in it. The retailer also needs to have a POS terminal.

Nowadays, virtually all mobile phones can make use of NFC technology, and more and more retailers have the appropriate POS technologies. Mobile POS sales are growing in popularity right alongside these developments, too. According to a firm that tracks online payments, the percentage of US consumers who uses mobile payment technologies rose to 17 percent in 2017, compared to only 6% in 2014.

As we see it, here's a breakdown of the pros and cons of mobile wallet technology:

Pros (besides diminishing the need for an actual wallet):

  • Location services help you find the best prices for an item and give you a coupon on the spot
  • You can also store travel ticket information and other important documents
  • You can analyze and control costs/budgets in real time


  • Not all retailers are on board yet
  • There are concerns about security (more on that below)

Cryptocurrencies and cryptocurrency mining

What would a digital wallet be without digital currency?

While still on the periphery, bitcoin and other cryptocurrencies are gaining popularity as "anonymous, decentralized digital currency" first seen in 2009 and which threaten to redefine our very concept of "money." You certainly don’t need cryptocurrency to make mobile payments; it’s simply an alternative to dollars. These are digital assets you "mine" on the internet by lending computing resources to the task of completing complex math in exchange for small amounts of cryptocurrency that can add up over time. 

Cryptocurrencies are kept in your digital wallet and so you can buy things with them - as long as the other party accepts them. Some examples of things you can purchase include T-shirts, chemicals, musical instruments, virtual art and countless other products and services.

The value of the cryptocurrencies—which in the eyes of some are as legitimate as any peer-to-peer currency - have ranged drastically, with bitcoin being especially volatile in the last year, though its market valuation seems to have settled some. 

Does a decentralized, hard-to-tax currency that doesn’t weigh down your pockets sound appealing? Here are some advantages and disadvantages to take note of.


  • They are traded person to person with no middleman
  • They are international currencies
  • Transaction fees are pretty much nil


  • Exchanges can be challenging due to transaction scripts
  • Since some cryptocurrencies are traded publicly, privacy issues can arise
  • They aren’t backed by anything and aren’t insured

Keeping your digital wallet close

So should you toss your wallet in the compost pile? Not quite yet. Those in the know predict we’re about five years from full-fledged implementation. Security issues, among other challenges, need to be hashed out.

Consumers are still dealing with the fear that comes from swiping an actual card, so it’s not likely that NFC is going to take the edge off those jitters, no matter how "lockable" and encrypted the digital wallet is. Cybercriminals no doubt are already figuring out ways to capture the information that is transmitted through the air, sans contact with a strip.

The inherent portability of smartphones, a feature once hailed with nearly unlimited enthusiasm, leaves them susceptible to physical theft. Digital wallet technology only raises the stakes. Phishing attacks and other forms of social engineering, already behind some of the most successful data breaches, can be used to coax smartphone users to unwittingly handing over sensitive mobile wallet login credentials. 

As all areas of life become more mobile, take care of your digital wallet in a similar way you would your actual wallet. Instead of double-checking to make sure your billfold is ensconced in a backpack, purse or man-bag, rely on mobile data security to keep you protected. It’s the best way to keep your financial information safe from invisible hacker "mitts" reaching in to steal your ducats.

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