When leaving the house, you usually have to search for a few items: your wallet and mobile phone. But if some major technology companies and financial institutions have their way, soon you may only need your phone.
A mobile wallet allows consumers to carry payment information, including debit and credit card information, in digital form on a mobile or wearable device. This means consumers could, theoretically, begin leaving their credit and debit cards at home.
Sounds convenient, right?
According to a 2013 global PayPal study conducted by Wakefield Research on consumers’ attitudes toward various payment methods, 83 percent of respondents said they didn’t want to have to carry a physical wallet. Additionally, 29 percent of Americans surveyed said they would choose to only bring a smartphone and not a wallet when going out. Mobile wallets are clearly gaining in popularity.
“Over the next couple of years, we’ll see up to 50 percent of transactions being done with a phone or other mobile device,” says Peter Olynick, card and payments practice lead for Carlisle & Gallagher Consulting Group.
However, once you’ve started using a digital system, what do you do with all the credit and debit cards you’ll no longer take with you when you leave the house?
Protecting the information on your physical credit and debit cards
You may want to keep the actual cards in case you decide to switch back from a mobile wallet to a physical one or if your mobile device is lost or stolen.
In that case, the Federal Trade Commission (FTC) suggests keeping the information stored in a secure location, like a fireproof lockbox in your home or a safe deposit box at your bank. The FTC also says you should regularly check your credit card and bank statements to be sure there’s no suspicious activity.
Elie Bursztein, who leads anti-cybercrime efforts for Google and who blogs at Elie.net, suggests scratching off the three- or four-digit security code from the physical card (and, if need be, storing that information separate from the card) and writing “See ID” in place of a signature on the signature line. This way, if your cards are ever taken from your home, you may still have some protection from their misuse.
If you feel you’ll never need your physical credit cards again or wouldn’t mind ordering new copies if using your mobile wallet doesn’t work out, be sure to fully destroy the cards. In this age of identity theft, simply cutting a card in half no longer works, experts at creditcards.com say.
Instead, cut cards into many small pieces, or shred them (being sure to destroy any magnets or chips), or, if you want to be really safe, burn the card in pieces.
Don’t throw away your wallet just yet
For now, though, even if you leave your credit cards at home, you’ll still have to keep your wallet with you, Olynick says.
“We’re a number of years away from being comfortable enough to accept only mobile payments,” Olynick explains. “There will be an extensive period when either is accepted… but it will be some time before you can say, ‘I don’t need to bring a physical wallet.’ ”
When will you finally be able to leave your wallet at home? It’s not the mobile payment systems that will hold consumers back from completely digital wallets, Olynick says. It’s the national and statewide identification systems such as driver’s licenses that will keep wallets in people’s pockets.
“At some point, governments will have to figure out, do they want to allow mobile identification? When that happens, that’s really when people will have the ability to leave their wallets at home,” he says.
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