Have you ever thought of going out for a shopping without carrying cash or plastic cards with you? The answer even now for most of us will be a big No. In the coming days though, the “No” will become a “Yes”. Thanks to the newly introduced technology named “Mobile Wallet” which has high potential to replace the current day physical wallet which we carry with us for making payments into a digital wallet. In some of the developed nations of the world (United Kingdom, United States, Japan etc), this method of payment is slowly replacing the traditional payment process. In India, this technology is however, at its beginner steps. Very few Indian outlets at present accept mobile wallets.
Usage of smart phones, tablets and mobile networks have been increasing every other day. With surging popularity of such devices, a day will come when almost everybody will make use of the smartest way of making payments. At present, the smartest method is making payments using mobile phones. Mobile wallets make use of the Near-Field Communication (NFC) chips of mobile phones and tablets to facilitate transmission of payment information. Several companies have developed mobile applications using which the payments can be done. The person who is making the payment needs to enter a PIN and select the payment account. A simple tap of the device will complete the payment process.
One may link their credit card, debit card or internet banking account in the mobile wallet application and transfer an amount to the wallet. The amount in the wallet may be used for future purchases. Since, a customer’s sensitive financial information gets linked with the digital wallet, stringent security is a major issue.
While Google scrapped Google Wallet for payments at physical stores and launched Android Pay few months back, Apple already had an Apple Pay application. While Apple Pay can only be used with iPhone 6 and iPhone 6 plus, Android Pay, on the other hand, is compatible with all the devices having atleast Kitkat 4.4 Operating System and NFC chips inside the phones. Samsung recently announced launching its own application. Samsung Pay, which will go live in a week, will become another entrant in this segment. However, it will be relying mainly on a technology called Magnetic Secure Transmission (MST) to pass on the payment informations. Samsung Pay will also work with NFC.
The mobile wallet market may be a novel concept but it is still in a nascent developing stage. The market will develop once it gets fully introduced in countries like India and China since both the countries offer high growth potential.