Do you wish there was a way you could pay with your credit cards at your favourite stores, but without having to carry them around all the time? That might be the future of credit card transactions thanks to mobile wallets where your credit card accounts are tied to your mobile phone. But are mobile wallets safe?

Let’s explore the idea of mobile wallets and look at some of the pros and cons you might want to consider.

What is a Mobile Wallet?

The term “mobile wallet” refers to using mobile phones or other mobile devices as a replacement for physical credit cards. Instead of carrying a wallet full of cards, you wave your mobile phone near a payment terminal. This is possible thanks to near field communications (NFC) technology which lets mobile phones communicate with the nearby terminal without having to swipe a card.

Mobile Wallet Pros

Here are some of the positive sides of mobile wallets:

• Mobile wallets offer greater convenience because you can stop carrying both a wallet and your mobile phone everywhere you go. For example, you won’t have to carry your debit cards, low interest credit card for financing, and rewards credit card for everyday purchases. You’ll only need your mobile.
• Mobile payments are intended to work a little bit quicker than traditional credit card payments which can lower checkout line wait times.
• Mobile wallets could allow users to pay with both credit cards and online accounts (such as Paypal) from the same terminal and mobile device.
• Mobile wallets can integrate with digital promotions or coupons — you load the offer or coupon into your phone and get the discount at the physical store location (no clipping coupons or reviewing printed ads).

Mobile Wallet Cons

There are also some downsides and potential concerns surrounding mobile wallets:

• When all payment options are combined into a single device, they’re all at risk if that device is lost or stolen.
• While there are security features to protect your information, at the very least you could lose access to all payment options if you lose your mobile phone.
• It isn’t uncommon for people to forget to charge their phones. If your battery dies while you’re shopping, you might find yourself unable to pay.
• There are privacy concerns about mobile wallets. For example, companies behind the systems or devices could track what you buy and sell that information to advertisers (like they do when they track your online purchases or ad-click behaviour on the Web).

Are mobile wallets a good thing or a bad thing? It really comes down to your own priorities. If you don’t mind having your shopping habits tracked like your online browsing habits are, the convenience of a mobile wallet might far outweigh any downsides. For others, they’ll prefer sticking with cards that can be kept separate. For the time being, we’ll just have to wait on the companies involved to come up with standard policies and processes so we can get the full picture.