Like any new technology, mobile payments might seem a bit complicated. Don’t worry, we’re covering what you need to know about the latest mobile payment technologies— without all the technical jargon.
How do mobile payments work?
Apple Pay and Android Pay
Apple and Android Pay rely on NFC technology. NFC stands for “Near Field Communication,” as in the phone and terminal must be near each other to work. Both the phone and the terminal must have NFC chips.
Samsung Pay is different than Apple and Android pay because it involves MST technology. MST stands for “Magnetic Secure Transmission” and interacts with a terminal just like the magnetic strip on your card.
Both of these technologies allow your phone to internally store your payment info and to communicate with a terminal in order to authorize the transaction.
Are mobile payment technologies safe?
Yes. In general, today’s mobile payments are secure. Your card information is encrypted in your phone to combat fraudsters. Essentially, your phone holds a virtual card—a decoy that you use to make payments. Unlike a physical card, your financial information (i.e. your name and card number) is not directly used.
Here’s a few tips to make your mobile wallet even more secure:
- Make sure you have a passcode on your phone. If your phone gets lost or stolen, it will be more difficult for someone to use your phone to make payments with your card.
- Set your phone up to be able to be turned off from anywhere in the event your phone has been lost or stolen.
- Monitor your card statements for any fraudulent charges. If you see anything suspicious, call your bank.
Comparing Mobile Payment Apps
- Apple Pay
- Introduced 2014
- One of the first mobile payment options to utilize NFC technology in phones
- Works with iPhone models 6 and newer
- Works with wearables (Apple Watch)
- Accepts most Visa, MasterCard and most large organizations
- Larger banks (like Bank of America) support Apple Pay, but support varies across smaller regional banks
- Android Pay
- Phone must be supported by NFC, which is available in newer Android models
- Utilizes a downloadable app
- Works on any compatible smartphone
- Currently supported by fewer banks than Apple Pay
Apple and Android Pay are not yet widely accepted in stores due to the fact that this technology is relatively unknown to consumers.
- Samsung Pay:
- Works with newest Samsung phones like the Galaxy S7
- Uses MST technology to mimic the magnetic strip on a card
- Works by hovering your phone over any terminal
- Use is not restricted to NFC enabled terminals
- Does not work (due to weak signal strength) if your card has to be inserted into the terminal, like at a gas station
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