Smartphones: Are we ready for mobile payments?

Your smartphone is turning into “a digital wallet,’’ said Mark Scott in NYTimes.com. This year, every cellphone carrier is trying “to persuade customers to use their smartphones to buy goods online.” But the revolution is already underway, thanks to mobile banking and third-party apps such as LevelUp, Google Wallet, and PayPal. Mobile payments made through cellphones are expected to jump 38 percent this year, to a whopping $325 billion. Emerging markets have been faster than the U.S. to jump on the mobile payment bandwagon. But it’s only a matter of time before it becomes commonplace to pay for food, drinks, clothing, and nearly everything via your smartphone, without cash or credit cards ever making an appearance.

This could definitely be a pivotal year for mobile payments, said Joel Mathis in Macworld.com. Big retailers, such as Walmart and Target, are already “banding together to create apps,” while “smaller restaurant and coffee chains have already dived in,” and even New York’s Metropolitan Transit Authority is considering replacing its reloadable subway passes with smartphone apps. Apple has been falling behind, since its iPhone “lacks near-field communication (NFC) technology, which Android phones and Google Wallet exploit to enable making payments simply by swiping your phone near a merchant’s scanner.” But if Apple decides to “pursue the mobile payment sector more aggressively,” its huge customer base will give iPhones a big advantage when it comes to mobile payments.

Consumers are growing more enthusiastic, too, said Abigail Tracy in Inc.com. A recent study, commissioned by MasterCard, found that more consumers are embracing mobile payments, with the level of “positive consumer sentiment” jumping from 34 percent in 2012 to 63 percent last year. But “most people still prefer plastic,” said Anick Jesdanun in the Associated Press. A 2013 Federal Reserve report said that just 6 percent of smartphone users made mobile payments in the proceeding 12 months. But “that isn’t stopping proponents from making yet another push.” MasterCard and Visa plan to soon let NFC phones access card information online, instead of requiring cooperation from device-makers and carriers. Meanwhile, Samsung is integrating PayPal transactions into its new Galaxy S5 phone, which will let users approve payments with a fingerprint instead of a passcode. A new, crowdfunded startup called LoopPay has released an app that stores credit card information and pairs with a special iPhone case, which emits magnetic signals and lets users pay with their iPhones at standard card readers.

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