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Thanks to mobile payment apps consumers no longer have to dig through their wallets to find the right card, swipe, wait for authorization, and sign.
Popular apps like Google Pay and Apple Pay enable you to pay seconds with a tap of your smartphone or watch.
Splitting checks at a restaurant or settling up with your friends afterward is easy with these apps.
You can even send cash to a friend via text message. And you can use popular messaging services like Facebook Messenger and WhatsApp to do that.
But what, exactly, are mobile payments? And how do you know which app is the right one for you? Let’s find out.
What Are Mobile Payments?
Mobile payments are payments made for goods or services through a mobile device, such as a phone, tablet, or smartwatch.
Those payments can be made:
- At retail businesses
- Over the internet to online stores
- To friends via a phone-based text message, or by using messaging apps like Facebook messenger
The latter is a popular way to pay for your portion of a shared dinner or Uber ride.
How Do Mobile Payments Work?
The mobile payment process can vary by app.
Typically, the app is connected to your bank account, which transfers the money through the app to the other person’s app account. Some apps, like Zelle direct bank-to-bank transfers.
Mobile payments take seconds to execute: making these apps a fast and convenient way to move money.
The technology used to power mobile payments varies based on the app you choose, and the type of transaction you’re making. Most use Bluetooth or Near Field Communication (NFC) for in-person retail payments.
Both of these technologies require the two participating devices (e.g. your phone and the digital cash register) within close physical proximity of each other to exchange data.
Most of the apps can also be used to transfer money over the internet to parties that are not physically present. Some, like Xoom and Circle Pay can be used to send money to friends and family overseas.
Are Mobile Payment Apps Safe?
Mobile payments are considered by many experts to be more secure than card-swiping because the apps use advanced encryption or tokens to mask your account numbers during processing.
However, nothing is entirely hacker-proof.
For example, a former Apple engineer, Martin Vigo, reported that he discovered a security flaw allegedly related to Venmo payments and Apple and rooted in the use of SMS messaging.
He alerted Venmo and the company fixed the vulnerabilities promptly. This is an accepted process: independent professional programmers sometimes discover vulnerabilities in software and to report their findings to companies so that the issues can be fixed.
Since no internet-based system is completely hacker-proof, it’s important for consumers to consider security features when choosing a mobile payment app.
Some apps offer two-factor authentication (2FA), which requires users to approve payments from another device or enter a second code.
Samsung Pay also offers fingerprint identification to authenticate payments.
How to Choose the Right Mobile Payments App for You
With so many mobile app payments to choose from, how do you know which is the right one for you? Below, we’ve provided a quick rundown of the top mobile payments apps, including the pros and cons of each.
When considering which mobile payment app will work best for your needs, we suggest you keep the following features in mind:
- The device and operating system you use
- Transaction fees
- Whether you want to pay merchants or send money to family/friends
- Location (not all apps are supported in all countries or stores)
- Security features
The Top 9 Mobile Payment Apps
Mobile payments may well be the future, but which one is right for you?
Below, we’ve reviewed nine of the most popular mobile payment apps so you can decide for yourself.
Square Cash app allows businesses and consumers to send and receive payments in minutes. You do not have to have the app to send money, but users who want to receive money must sign up.
They also offer a loyalty program called “Boost,” which offers discounts and deals to users. One of the major drawbacks is it cannot be used at POS or for online purchases (including with Square POS).
However, you can request a debit card you can use to make payments form your Square Cash account, or you can transfer funds to your bank account.
Fees are 3% for senders and 1.5% for instant bank transfers.
- Supports Bitcoin buying and selling
- Allows payment cancellation
- Easy to use
- Limit of $250 spending per week
- Does not work for online or in-store purchases (including Square POS devices)
Apple Pay is an NFC-payment system that allows users to make payments in person, in iOS apps, and online.
Person-to-person payments: Residents of the United States can send and receive money using “Apply Pay Cash.” Money can be sent via Messages or Siri.
There are no fees if you use your Apple Pay balance or a debit card. If you use a credit card, there’s a 3% transaction fee.
Many stores support the use of Apple Pay, including large retailers like Target, 7-Eleven, Airbnb, and even many grocery stores. Simply tap your phone and go.
Payments through websites do require Safari, and the laptop must be in close proximity to the iPhone housing the Apple Pay information.
- Widely accepted
- Easy to set up; most newer Apple devices come with it already installed
- Uses anonymized digital tokens to hide account numbers
- Only works with Apple devices (no sending cash to your Android-loving friends)
- Cannot store boarding passes, movie tickets, etc.
Formerly called Android Pay, Google Pay is an NFC-based mobile payment app that allows users to make payments via their Android-compatible devices.
It also stores gift cards, loyalty programs, e-tickets, and boarding passes.
The “Google Pay Send” lets you easily send money to friends, but it is a separate platform.
Google Pay charges no transaction fees for bank transfers or debit cards, though you will pay 2.9% for credit card usage.
Is Google Pay Safe? Yes, Google Pay provides several layers of security, including substituting card numbers with virtual numbers, encrypting payment information, and requiring devices to have a code lock to enable Google Pay.
- Allows both online and in-app payments
- Multiple layers of security
- Widely accepted
- Features are split; need Google Pay Send for peer-to-peer payments.
One of the most popular new(ish) mobile payment apps, Venmo makes sending and receiving cash simple.
Features include an in-app chat, the ability to split checks, transfer money to your bank account, and make payments online using a PayPal button.
You can even make payments using Siri and iMessage.
Fees include a 3% transaction fee for credit cards and some debit cards.
Some of Venmo’s FAQs could be clearer. For example, the home page displays a mobile phone and touts “making purchases at approved merchants” while a FAQ states “You may only use Venmo to pay for goods or services using a Venmo card . . .” (A Venmo card is a debit card backed by your Venmo balance. )
- Very simple interface
- Widely used
- Works online, iOS, Android, and via Facebook messenger
- Default privacy settings share payments in a social media-like feed
- Does not support in-store payments
Samsung Pay allows users to tap their phone to pay at any POS that accepts credit cards. It even works with conventional magnetic stripe readers.
It is supported on all Samsung phones and Gear 3 watches. Samsung Pay also awards 5 rewards points for each use. However, it does take 2,000 points to earn a $5 gift card.
The app stores other information, such as gift cards, shopping loyalty programs, e-tickets, and even airline miles accounts.
- Can be used anywhere that accepts credit cards, including traditional swipe machines
- Can be used to make person-to-person payments, thanks to the “Money Transfer” feature
- Supports gift cards, loyalty programs, and frequent flier accounts
- Works in the US and 23 other countries
- The interface is busy, not as intuitive as other platforms
- Requires a PIN in most cases, so paying is not as seamless as with other platforms
Long the leader in online payments, PayPal lets users easily make payments to online retailers or send peer-to-peer payments.
After you create a PayPal account, connect it to your bank account for easy access, or request a PayPal debit card.
The PayPal One Touch feature allows for faster payments by bypassing the login process.
PayPal has a well-known reputation for security, however, it does lack NFC.
- Fees include .25 charges for immediate bank deposits. Buying is “always free.”
- Friend-to-friend payments made in the U.S. are free if you use your PayPal balance or connected bank account. There is a 1% fee (with a $10 maximum) for using connected credit cards and debit cards to make peer-to-peer payments.
Note: friend-to-friend card-funded payments typically execute immediately, whereas bank account payments may take a week or more.
PayPal’s algorithms may detect a card payment is unusual because the recipient has not received money from you before. It’s possible in these cases that your card-funded payment may be delayed by a few days.
- Works internationally
- No purchase-related fees
- Most widely used online payment platform
- Very secure, including fraud prevention measures
- Does not support NFC
- Need the PayPal debit card for in-store purchases
- Residents of Latin America are currently unable to send or receive PayPal money transfers. PayPal states: “We’re working to make that option available in the future.”
Xoom is a PayPal-owned app that makes it easy to send payments to individuals in 66 countries.
Recipients do not need to download the app — but they must have a PayPal account.
The app works on newer Apple and Android devices.
Xoom fees depend on the payment method you choose, how much money you are sending, and what currency the payment is disbursed in. There’s a handy calculator on their site.
The company notes: “In addition to the transaction fee, Xoom also makes money when it changes your send currency into a different currency.”
- Send money to people in 66 countries
- Do not need an email account or Wifi connection to receive money, though it does require a phone number for Xoom to contact recipients
- Minimum payment of $10
- Xoom makes money when it effects a currency exchange. This is in addition to the transaction fee
- Does not support in-store or online purchases
Zelle is a simple person-to-person payment network created by the banking industry. It is bare-bones but works well if you just want a way to quickly send friends money.
Zelle does require users to have a U.S. bank account. Set up is quite simple. In minutes, you can send money to friends, even split payments.
It works within most large banks’ own apps, so you don’t have to download a separate app (though you can).
Zelle charges no fees for sending or receiving money. However, it does suggest you check with your bank or credit union to find out if they charge fees for such transactions.
- Money goes directly to your bank account
- Supports canceled payments
- High payment limits
- Requires a US bank account
- No international features
- Cannot be used in-store or for online purchases
- Does not support sending payments through social media or text
Circle Pay is a free app that allows consumers to send money between currencies, countries, and friends.
Users can sign up via Facebook or email then send money via in-app chat and even split checks with up to 20 friends.
There is no charge for instant bank transfers, which most other apps (looking at you PayPal and Google Pay) charge for. Caveat: you can send money to 29 countries in U.S. dollars, British Pounds, or Euros. If you choose another currency, exchange rate fees apply — but unlike Xoom, there are no markups on those fees.
One of the biggest pros is that Circle Pay supports international payments in Euros and British Pounds.
- Requires two-factor authentication for better security
- No fees for instant bank transfers
- Offers $5 referral bonus
- Cannot be used for in-store or online purchases
- Does not support store loyalty programs or gift cards
- Does not support Bitcoin
Mobile Payments Comparison Table
|Peer-to-peer payments?||In-store purchases?||Online purchases?||Loyalty program?|
|Apple Pay||✔ (via Apple Pay Cash)||✔||✔||✔|
|Google Pay||✔ (via Google Pay Send)||✔||✔||✔|
Here are some answers to common questions we receive about mobile payments.
Why am I seeing a charge that’s higher than the item I purchased with my mobile payment app?
Some banks may place an authorization hold on your account that’s initially (and temporarily) higher than the item you purchased.
Industries that tend to engage in this practice include restaurants and bars, taxis and limos, gas stations, cruise lines, health and beauty services, hotels, cruise companies, and car rental companies.
It’s worth noting that many gas stations will place a minimum hold of $75.00 on your account when you use your mobile app to purchase any amount of gasoline.
Is Google Pay better than PayPal?
Google Pay and PayPal share many features, so they are quite similar. However, they do differ on debit card-related transactions. Google Pay does not charge a fee when you use funds via your debit card. PayPal charges 2.9% plus a $0.30 fee per transaction.
Which is the best payment app?
Determining which mobile payment app is “best” will likely depend on the device you’re using and the problems that you want the app to solve.
Many believe we moving towards a cashless society, but only time will tell.
In the meantime, mobile payment apps are helping make it easier and more secure than ever before to shop and send money to family and friends.
As you compare the features of the apps above, be sure to consider the security features and use a unique, secure password to keep your money secure.
Contributing editor: Sherrie Gossett