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Jeffrey Coleman, an information systems architect from Silver Spring, Maryland, has mixed feelings about digital wallets, apps that store credit card data so you can make payments with a click of your phone. Google Wallet can be used to pay for items at more than 140,000 retailers, but the 39-year-old Coleman has been hesitant to use it. “I’m concerned that if my phone gets lost and someone accesses my account, my information could be compromised,â€ he says.
The mobile payments industry is expected to reach $214 billion by 2015, up substantially from the $16 billion reached in 2010, according to research firm Aite Group. Digital wallets make shopping easier and less time consuming. “With digital wallets, your phone stores secure payment information linked to a credit card or prepaid debit card as well as gift and loyalty rewards cards,â€ says Andrew Kameka, managing editor of Androinica.com, a mobile products website. “If I go to a store and buy something, all I have to do is put my phone against the register and the funds are automatically deducted.â€
Though interest in digital wallets is growing, no company has yet cornered the market. Google Wallet works at merchants that accept MasterCard PayPass phones and on certain Sprint Nextel or T-Mobile phones.Â Another effort, called Isis, is being jointly developed by AT&T Mobility, T-Mobile USA, and Verizon Wireless. Visa, MasterCard, American Express, Discover, Chase, Capital One, and Barclaycard have all announced support for Isis, which is being test-marketed in Salt Lake City and Austin, Texas. In May, Visa and MasterCard each unveiled new digital wallet platforms: Visa’s V.me and MasterCard’s PayPass Wallet Services.
For the growing number of consumers who pay for items using a digital wallet, security concerns are likely to be top of mind. “Banks have put a lot of effort into designing mobile apps that are secure,â€ says Kevin Mahaffey, chief technology officer and co-founder of Lookout Mobile Security. However, it’s prudent to take additional steps to protect your financial information.
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