Most Americans carry their cell phones everywhere, so there is great reason to be excited by technological advances such as a mobile wallet. Simply use your phone to pay everywhere you go and leave the credit cards and cash behind.
Benefits Of The Mobile Wallet
Even better, the mobile wallet offers many benefits that credit cards don’t come close to offering. For instance, buy a Groupon using your phone and don’t worry about printing it off or forgetting it; simply pull it up on your phone at the restaurant.
According to Time Magazine, “Mobile wallets can also be your shop-bot, sniffing out exclusive offers—say, $2 off oatmeal at Jamba Juice as you walk by. Not hungry? Save the coupon to the wallet, which will automatically activate it when you buy your next oatmeal.”
Amazon is also using the mobile phone to their benefit, much to the chagrin of brick-and-mortar stores. This past holiday season, “Amazon even offered $5 off to customers who scanned a bar code in a store—so Amazon could offer a lower price on the same item.”
If you are at a busy restaurant and don’t want to wait for the waiter to process your payment, you can use an app on your mobile phone. “To solve the lunch hour crunch at Pizza Express restaurants in London, for instance, PayPal created an app that allows customers to enter the number from their bill into their phone and then pay without waiting for a server to run a credit card.”
Most people will love the mobile wallet because of the convenience. Even vending machines are being fitted to accept mobile wallet payments. We could finally move to a truly cash free society. The frugalistas among us will rejoice in the ability to use coupons more easily and find exclusive discounts.
The age of the mobile wallet sounds like a win-win for nearly everyone involved, but is it?
Financial Dangers Of The Mobile Wallet
While it is true your mobile wallet can help you find additional bargains, there is a real financial danger there.
In the above example, having a coupon for $2 off oatmeal at Jamba Juice was perceived as a benefit. Yet, is it? What if you had no intention of ever buying oatmeal at Jamba Juice, but now that you have the coupon, you feel like you should buy it because it is such a good savings. How many people do you know who buy things they don’t need or didn’t even previously want because they could get such a great deal?
Likewise, convenience often translates to spending more freely. Experts agree that people generally spend more money when buying with credit card rather than cash, though the exact percentage that they spend more than if using cash is up for debate. If a mobile wallet is even more convenient than credit cards, it seems to reason that people will spend even more.
Even the little expenses can add up. If you would like a pop from the vending machine but don’t have the change, you may just skip it. If even that is available via mobile wallet, you may not skip it. Over time, those little conveniences can add up.
A mobile wallet offers convenience unparalleled to anything we have experienced before. In addition, it can be a powerful tool to save on the majority of your purchases. Yet, just like credit cards that offer generous rewards, the benefits of the mobile wallet will be best utilized by those who are already good at managing their money and controlling their impulse to buy when they find a good deal. If you are like many Americans who find themselves mired in credit card debt, the mobile wallet may just offer one more way to spend money irresponsibly in the name of convenience and a good buy.
What are you thoughts on the mobile wallet idea? Would you use one? Why or why not?
I think mobile wallets are a great idea. Your smart phone isn’t really a phone anymore, it’s more of a remote control for your life. Plus, Adaptu just launched Adaptu: Mobile Wallet, check it out: http://itunes.apple.com/us/app/adaptu-wallet-personal-finance/id478912145
I may eventually change my mind as my wife and I went without cell phones until our 50’s. At this point I think I would spend more money with a mobile wallet. I also feel it is a great idea to go places more than occasionally and not bring any electronic devices at all including cell phones. We are gettting way to dependent on them. I watch families eating dinner out and every one is on their cell phone texting, etc. The only way we can get an answer from our kids is to text them. What happened to talking??? That would be a novel idea..
Jeff
Kind of excited about the mobile wallet. I like how you brought up the potential financial implications. Many people would hit 1. security, 2. ease of use, 3. how it works, but you nailed a different aspect…how will it truly change the wallet? People could be throwing money out the window (or phone) before they know it.
Most likely a mobile wallet being a primary method of payment is a few years away. First, everyone has to own cellphones that can hold the technology, then shops have to pay for the readers, and then the wallet wars will begin Google, Amazon, Paypay…etc.
I also believe it will cause more spending as many studies have shown the further you get away from real dollars in your hand, the less pain you’ll feel when you spend. Now, only if your phone would shock you if you spent stupidly with your mobile wallet.
Since I like using technology, I probably would. I use a cash back credit card and transfer the money I’ve spent from my money market to credit card as soon as I buy something. My credit union would let me have a positive balance in the credit card account. However, I like to get a little interest from the money market until I need to buy something.
I try to live frugally with priorities set for things I like. Possessions, such as lots of clothing, furniture, eating out, etc. are not priorities. I buy many things used or look for free things. Having a few electronics, like a laptop and a smart phone are priorities. Another priority is travel. I live with less “stuff” so I can have what is important to me. I love being able to stay in contact with friends all over the world via the Internet. I also like using my smart phone when I am not at home. I have a free list-maker app that helps me stay on budget and avoid impulse purchases while shopping. My phone also helps when I needed to find the location of an address on a trip.
It may not work for others, but it works for me. That’s what counts!