Why Mobile Payments Are More Than a Credit Card on Your Phone

MasterCard and PayPal are testing phone payment systems that offer more than just

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When Google announced Google Wallet, its mobile payment system, back in May, beyond the usual privacy and security concerns, a "so what? who cares?" factor crept into the conversation. Credit cards, debit cards and cash are pretty convenient, pointed out The Atlantic's Alexis Madrigal: "I can't help but wonder, though, if the biggest question remains unanswered: why would people use their phones to pay for things if they have perfectly acceptable alternatives already?" If it's just a credit card on your phone, there's little incentive to change your habits--and that goes for any cell phone-credit card mashup. But, companies experimenting with the tech, like PayPal and MasterCard, who both unveiled their mobile payments platforms, report Endgadget's Josh Volpe and, in another post, Endgadget's Lydia Leavitt, are adding some bells and whistles, making mobile payments more than a credit card on your phone.

It's faster. Swiping plastic takes time. You have to rifle through your purse or pants-pocket, find the card, slide it through the machine, maybe enter your pin or decline giving $5 to colon cancer, and then sign with a germy stylus. Mobile payments have fewer steps, as one of Madrigal's commenter's, Jef, argued, "It's just way quicker than any other methods you've mentioned." Both MasterCard and PayPall are playing that up. Google Wallet will work alongside MasterCard's PayPass stations, which as Gizmodo's Matt Buchanan points out, are pretty ubiquitous. "you'll be able to use it anywhere that's hooked up with PayPass, which is at a lot of retailers already." While PayPal's system won't have that advantage, Leavitt reports the company wants to incorporate "fast checkout," and as this video shows, there are lots of features that ease payment transfer, like phone-bumping.

Yet we're not really sure how much faster the system really is. In the MasterCard demo video over at Endgadget, it looks a bit cumbersome to us, but maybe it just takes some practice.

It will make you more fiscally responsible. Credit cards are far too easy to use. Even if you don't have the funds, you could swipe all day long. Unlike your physical credit card, MasterCard's app has features to help you curb your spending, explains Volpe. "If you're the paranoid type or just a spendthrift, the app offers plenty of options to set spending limits, approve / block purchases via category (i.e. dining, entertainment) and enable alerts for overseas activity." Of course, you have to set up said limits, but, maybe you're the responsible type.

In a different vein, PayPal plans on offering hyper-local deals, a more fun way to save money (save while you spend!). And both systems will also focus on QR codes, which help buyers, "scan for coupons, order remotely and apply the discount -- all without leaving their seats," explains Volpe.

It also is more educational. Credit cards have one function: Paying for things. Mobile payment apps can educate you as you shop, with the wave of your phone. MasterCard has utilized the same technology that your Xbox Kinect uses to make shopping more informative. "Utilizing the gesture recognition tech, items could be selected on-screen by holding your hand over an item and navigating through the checkout process," reports Volpe. That means you could know a lot about a product by just hovering your mobile device over a product. That's pretty cool.

Neither PayPal nor MasterCard has released its system yet, so getting buyers to change habits will depend on just how seemless mobile payments make these actions. But, if it really is better than a credit card on your phone, your wallet might get slightly lighter.

This article is from the archive of our partner The Wire.