Digital Payment Options
Get Up-to Date on Today's Mobile and Digital Payment Options
When we make a purchase these days, most of us don't use cash or write out a check; and given the emergence of digital payment options, soon we may not rely on our debit and credit cards either. First embraced by millennials, these digital alternatives are becoming mainstream, driven by a growing multi-generational desire for added convenience, simplicity and security in paying online and in traditional retail stores.
Eighteen percent of American adults are reaching for their Smartphone at checkout to access a digital wallet or mobile app linked to their bank and/or credit card information. 1 Tapping the screen in a mobile app or waiving the phone near a check-out terminal lets users make a purchase, transfer money, receive and apply coupons as well as participate in loyalty programs.
Digital payments use tokenization – the substitution of personal account information with a randomly generated number or symbol – to protect privacy and provide security to a greater degree than other payment options. 2
PayPal, which dates to 1998, was the very first digital wallet. First used on desktops, there's now a mobile version for Smartphones. PayPal's Venmo service is a free app that lets users make and share payments with friends. It's a favorite of millennials who use it to split meal and entertainments costs. 3
Rather than requiring the download of an app, the latest Apple iOS and Android phones have digital wallets built right into their operating system. Both Apple Pay and Android Pay has been used primarily for in-app, internet purchases, but that is changing as more retail stores invest in new point- of-sale-terminals with the wireless near field communication (NFC) technology these wallets require.
Samsung Pay, which comes preloaded on new Galaxy phones, is currently accepted at more merchant locations than its two competitors. Its magnetic signal technology can be used wherever a credit or debit card can be swiped or inserted, which means it's unable to support in-app purchases. 4
Another emerging means of payment is digital currency, also known as digital money or crytocurrency. This is an electronic medium of exchange, such as bitcoin and more recently, Monero, where online credits are traded for goods and services. The digital currency doesn't exist in physical form and no banks are involved. To date, digital currency is not widely used, either domestically or internationally. 5
Are you ready to go digital and abandon cash and plastic? Loyal users predict you'll love it. And who knows? You soon may wonder how you paid any other way.