Your Smartphone, Your Wallet: What You Need to Know
Digital wallets vs. mobile payments
A digital wallet is a program by which users can securely store multiple credit-card data, allowing for one-click-style online shopping. Mobile payments rely on a phone instead of a credit card, using technologies like near-field communication (NFC) or QR codes. Many mobile payment solutions are being designed with the aim of using some sort of mobile wallet, which like the digital wallet, can house numerous credit, debit and loyalty card information.
What is NFC?
Near-field communication is a technology with a corresponding set of industry standards that allows two objects in close proximity to wirelessly exchange information via radio waves. NFC chips, found in newer phones, can read and transmit data. Plus , NFC tags can be encoded with static information to be read by NFC-enabled devices. Payments are just one application of the technology. MasterCard and Intel just partnered to bring NFC to laptops.
What are SMS payments?
Some companies, like Venmo, allow users to create profiles tied to bank accounts. Users can then pay with text commands like "Pay 555-555-5555 4.75 for a sandwich," after the trusted, two-way relationship has been established. Other SMS payment systems work by adding the charge to a carrier bill.