Mobile wallets are supposed to save us from ourselves, centralizing our bank and credit cards into our smartphones so we never have to carry a physical wallet again. No more worrying about forgetting your wallet at home, and even if your wallet is stolen you still have all the necessary information on hand, as long as you have your smartphone. But every modern convenience comes at a cost. Mobile wallets require a great deal of personal data, and some are more surprising than others.
Before you sign up or start using mobile wallets, better check out first what these service providers get from their consumers.
As with any service, you need to register or sign up to use a mobile wallet program. And signing up entails providing your name, mailing address, email address, age/age range, mobile telephone number and billing address associated with that number. They’ll also need your bank account number or credit card number, government-issued identification number such as social security number or taxpayer identification number for US residents, login and user password etc. Though information acquired from users vary from one service provider to another, you can expect that you’d be giving out your basic information when you sign up for their service.
But there’s some other surprising instances where additional data is being acquired by mobile wallet programs, and we’ve uncovered a few:
Taking extra data
Interestingly, some mobile payment services may be taking more consumer data than necessary. The Canadian banking and credit union industry published the Mobile Payments Reference Model, which serves as a guideline to the limitations and extent of acquiring data, as well as the availability of these data. The guideline states that “each ecosystem participant should only have access to the minimum information required to perform its primary role. The default for ecosystem participants should be to protect end user and merchant data. Access to and usage of data must be disclosed to the end user and the end user’s permission explicitly granted.”
Mobile wallet providers in the US should take a page from Canada. Maybe then more people would be interested in using the service, worrying less about the data being acquired by these service providers.
Cookies, cookies, cookies!
But did you know that aside from your personal information, mobile wallets also acquire non-personal information through cookies to get a user’s browser type, IP Address, the URL of the previous website you visited? Yep, mobile wallets track your internet movement. But in their defense, they say they do that so they can push promos, discount coupons, notifications or updates to their subscribers. Mobile wallets also claim that they use information acquired to improve their service and towards the development of new technologies.
Still, it’s a bit freaky to think that there are other people who knows what we do in our daily lives. Take Google for example. They discovered how important consumers’ data is to their end goal, so the search engine giant began collecting things long before privacy and security became an issue. Because of this, they’ve been able to create Google Wallet, which combines retail payments, coupons, offers and loyalty cards in a single service using NFC technology.
Your data shared with third parties
Another thing you need to know is that information acquired from users is shared with third party service providers, such as merchants or network providers, in order for a transaction to be processed. These third parties use the information to advertise their products and services – luring in shoppers to purchase more things using mobile wallet programs.
But do you know that there’s a major difference between using your credit cards the traditional way and using mobile wallets that bill your carrier network monthly? If your credit card or credit card number gets stolen and the thief decides to go on a shopping spree, by law, the consumer is only liable for $50. But if a mobile wallet from network carriers are used by thieves, the consumer is not protected by the same law regarding fraud. So in terms of customer protection, credit cards is still better than using mobile wallets.
Consumers embrace technology
Despite the recent issues that have popped up around mobile wallet services, like Google Wallet PIN numbers discovered to be quite vulnerable, and even with rising consumer knowledge around mobile payments, there’s an increase in mobile shopping and personal finance across the board.
JiWire’s recent Mobile Audience Insights Report shows that more shoppers are interested in using their mobile phones for shopping and organizing their bank accounts and everyday expenses. The report stated that 37% of on-the-go consumers have used a mobile wallet within the past three months and 8% of the 63% who haven’t tried the service stated that they were interested in using mobile wallets when shopping.
“This rapid adoption of mobile wallets reinforces that the market is ripe for this sort of technological advance. Consumers seem to be both comfortable and curious about using their mobile phones to purchase,” said Dee Dee Paeseler, director of strategic marketing at JiWire. “This trend is likely to help both brands and retailers close the loop on mobile transactions, ultimately taking them to the next level.”
Why use mobile wallets?
Still you wonder, “Why use mobile wallets when you can pay for things in cash or with your credit or debit card?” The answer is quite simple: mobile wallets simplify things.
Mobile wallets track your expenses so you won’t constantly ask yourself “Where the hell did my money go?” And once you’ve tied your accounts in your mobile wallet, managing or transferring money from one account to another is a breeze. Plus, mobile wallets lets you know how much credit you have left and quickly inform you which of your cards will give you the best rewards for certain merchants, offering insight to your own data so you can make better decisions.
Retailers want in on the game
If you thought consumers are the only ones who get screwed for messed up mobile wallet services, then you are wrong. Retailers can get duped by shoppers, causing some to seek out more electronic payment services to gain more consumer data they can use for promotions and protection. Some retailers even state that they want to create their own mobile wallet service so they can be protected, as most services are aimed at protecting consumers and not vendors.