Given all the hype surrounding the emergence of mobile wallet and other mobile payment platforms it’s always good to weigh in on the impact this particular market has on consumers, which is what Consumer Reports released results from a recent investigation it conducted earlier this week.
While a number of mobile wallet services have sprung up in recent years, just 5 percent of U.S. consumer actually used these services to make everyday purchase last month. Double that amount of consumers instead chose to use billing services like Payfone and Zong, which was recently acquired for $240 million by PayPal Inc., which allow you to tack on purchase charges to your monthly cellular phone bill.
According to Consumer Reports, companies involved in the mobile payments movement generate about $50 billion a year in fees they collected by consumers, and banks and other technology companies are looking to find new ways to tap in on that cash. Take for example mobile payments company Obopay: Linking your Obopay account to debit or credit card can run you 1.5 percent of your transaction, while linking it directly to your checking account will cost you a flat fee of 50 cents per transaction.
“As these new forms of payment grow more popular, consumers must be careful to understand the costs, and disparities in protections associated with the promise of new convenience,” said Consumer Reports’ senior editor Jeff Blyskal in a statement.
Consumer Reports suggests you take the following steps to protect yourself when venturing into the mobile payments world:
- Read the fine print: As with any contract you sign, make sure you know what you’re getting yourself into, and what you can expect to pay in fees. If it’s not explicitly spelled out for you then call the company and ask a representative to offer further explanation
- Use your credit card: Consumer Reports was quick to point out this past June that the payment method you link to your mobile phone or mobile payments platform can heavily impact your ability to dispute erroneous or fraudulent charges. Mobile payments linked to credit cards offer consumers the greatest federally-mandated protections, while those linked to prepaid and gift cards offered the least.
- Protect your information: Never share personal information, use security software and keep your card and cash in a secure place.
One in four American consumers reported having either an unauthorized charge, billing error non-credited payment or other problem when paying bills last year. Protect yourself by using a payment method that can guarantee you save the most of your hard-earned cash.