What effect will mobile wallets have on our spending?

Increased collaborations between local credit card providers and global tech giants have made mobile wallet use more common – meaning everyday transactions can be more secure and hassle-free. We take a look at what this technology is all about.

What is a mobile wallet? There is a range of digital payment methods on offer in the UAE and different apps are compatible with different mobile devices. Samsung Pay, PayPal, Beam Wallet and Google Pay are for Android smartphone users, while Apple Pay comes preinstalled on iPhones. Telco Etisalat, Paypal, and even some local banks such as Mashreq and Emirates NBD. RAKBank has its own mobile wallet offerings. Basically, a mobile wallet stores your credit and/ or debit card information on your smartphone and links to a payment gateway to enable purchases at a point of sale. Like a credit card, mobile wallets will only work at merchants who are set up to accept the device as a payment method – usually you will see a logo at the register for the types of mobile wallets that you will be able to use.

How does it work?

Open the mobile wallet application on your smartphone and register the details of your credit card or debit card. Typically, MasterCard or Visa cards issued by partner banks will work. Local UAE banks linked with Apple Pay, for example, include ADCB, Emirates NBD, Mashreq and RAKBank. Next time you are about to buy something, hold your phone up to the contactless terminal to make a payment electronically via Near Field Communication technology. Most mobile wallet apps can also store information on users’ loyalty cards, coupons and tickets.

How secure are mobile wallets?

Every single transaction is encrypted. Mobile apps such as Apple Pay, Google Pay and Samsung Pay use advanced tokenisation, which substitutes the confidential account number of the cardholder with a different card number – also known as a token. This token is used by the payment device and merchant. It ultimately minimises the chances of cyber breaches as it can only be used from the device on which it is registered. Although mobile wallets are comparatively safer than swiping physical debit or credit cards, fraud can occur. Use caution when logging on to public WiFi because that is when your personal data is most vulnerable.