CREDO Mobile Blog

Tuesday Tip: How Mobile Payment Works

Tuesday Tip: How mobile payment works

Two years of your life. If you’re an average American, that’s the amount of time you’ll spend waiting in line.

Some of it can’t be helped. Like airport security. But some of it is uncalled for and annoying. Like when that person in front of you at the cafe takes 5 minutes to pay for a $3 latte with a credit card to get—what?—a few feet’s worth of airline miles? Aaargh!

Luckily, help is at hand. Mobile payment options speed transactions and shorten lines—and they’re increasingly popular. By the end of 2018, one-quarter of U.S. smartphone users over the age of 14 will have made a mobile payment in a store.

Here’s what you need to know to get started.

What are mobile payments?

A mobile payment means just that: making a payment with your mobile device. The payment can be at a restaurant, grocery store or any other store that accepts mobile payments.

Or it can be person to person, such as paying back a friend who spotted you for dinner or paying an eBay seller for a pair of shoes. Because they happen over the internet, payments can be done anywhere. Just open the app on your phone and tap a few times to send money. The payment may be made with your bank account, debit card or credit card. Popular P2P payment apps include Venmo, Zelle, and PayPal. Paying via your bank account or debit card is usually free while using a credit card will incur a small fee.

What is a mobile wallet?

This is an app on your phone that stores the information from your credit or debit card and enables you to make purchases with your phone, without having the actual card with you. The big three mobile wallets are Apple Pay, Google Pay, and Samsung Pay, which come integrated on their respective devices. iPhones have Apple Pay, Android phones have Google Pay and Samsung phones have Samsung Pay.

You can also download a mobile wallet app from your bank or credit card company. If you have a card from, say, Chase, or Capital One, you can download their wallet app to your device and use it wherever it’s accepted.

Mobile wallets make purchases quick and easy. When you arrive at the register, just open the wallet app, hold your phone up to the compatible reader and you’ve paid. Mobile wallets can also be downloaded to tablets and smartwatches.

What is a merchant wallet?

Megachains like Starbucks, Dunkin’ Donuts and Walmart offer their own “closed loop” payment apps that work only in their stores. For example, you can download the Starbucks wallet app (now the most popular mobile payment app in the world), put money in it, then use it to pay for your coffee.

These merchant apps are particularly popular because they give users rewards, like one free coffee after you buy 100. (If you do go to Starbucks, we encourage you to bring your own mug, since Starbucks paper cups still are not recyclable—although we did recently pressure Starbucks to begin development of a recyclable cup.)

Can you earn credit card rewards with a payment app?

The short answer is yes. The long answer is sometimes not. Yes, if your credit card gives you points, miles or cash back on your purchases, you’ll still earn those rewards if you use that credit card via a mobile payment app, same as you would if you used the plastic card.

But if your credit card gives you bonus rewards when you use it in specific places, like, say, 3% cash back when you use it at a restaurant, your mobile wallet may not categorize the payment exactly and you may not earn those bonus rewards, so check with your card issuer to be sure.

Some mobile wallets offer you their own rewards for using them. For example, Samsung Pay gives you rewards points you can use when you buy Samsung products, in addition to the rewards you get from your credit card company.

Is a mobile wallet secure?

Security is a primary reason more people have not embraced mobile payments. Many fear that when they transmit their credit card information into the atmosphere, some hacker might vacuum it up and go on a spending spree.

In fact, a mobile wallet is among the safest ways to pay. Think about it. When you write a check, a fraudster can easily steal all the private information that’s printed on the front of it: your name, address, bank, account number and routing number. They just take out their phone, snap a photo and it’s theirs.

And when you use a physical credit or debit card, the data can be stolen by a skimmer at an ATM, gas station or restaurant.

Payment apps and mobile wallets, on the other hand, create a random, one-time number—a transaction token—for every transaction. Even if someone is able to learn that number, it’s not valid for other transactions. Although you load your card information into your payment app, your card number is not shared with the merchant when you pay. Many payment apps also require a PIN or your fingerprint to authorize payments, so the app can’t be used by someone else even if your phone is stolen.

One other benefit of mobile payments: if more people don’t use credit and debit cards, that’s less plastic pollution fouling up our planet. Here’s another way you can help fight the plastic problem: try these alternatives to a plastic water bottle.

Tuesday Tip: 4 Steps to Reduce Your Waste

4 Steps to Reduce Your Waste

The world has a gargantuan garbage problem.

People now produce more than 2 billion tons of waste every year, most of which is burned, buried or shoved into the sea. At the current rate of ocean dumping—one garbage truck per minute—there will be more plastic in our oceans than fish by the year 2050.

We truly live in a throwaway society. Ninety-nine percent of what we buy gets trashed within six months. The average American tosses out three and a half pounds of stuff each day.

But there is a solution. The three R’s: reduce, reuse, recycle. You’ve heard it before. You may be tired of hearing it. But it does work. Sweden is so good at recycling that it now has virtually no waste. In fact, it has to import garbage from other countries to keep its recycling plants running.

Here are 4 simple steps you can take to cut your household waste.

Bring your own bag

As noted above, plastic pollution is now a global crisis, with plastic bags cluttering landscapes and clogging oceans. If your city is not one of the enlightened few that has banned plastic bags, you can help by putting your purchases in your own cloth tote. There are many reusable grocery bags on the market. Check out these 16 different options at Recycling.com.

You can also easily reduce the number of plastic bottles you buy if you carry your own reusable beverage bottle. Have a look at a few recommendations in our recent post.

Stop wasting food

Americans toss a lot of food. In fact, around 40 percent of the food we produce ends up wasted. That works out to an average of 400 pounds per person each year. You can limit food waste at home with a few easy steps.

Shop smart: plan your meals, make a detailed list of what you need before you go to the store and stick to it. Eat your leftovers: get good containers and label them with a date to avoid spoilage. Date labels, which many times refer to peak quality rather than safety, are notoriously confusing and might lead you to throw out perfectly good food, so read carefully.   Read more ideas in our food waste post.

Buy less packaging

It’s hard to avoid packaging when you shop. But you can choose items wrapped in less packaging when available. For example, you can buy in bulk. You can also select options packaged in aluminum or paper rather than plastic. And try to avoid items packaged in a mix of materials, such as paper with a plastic lining, because these are harder to recycle.

Bring your own cup

A lot of people think that disposable coffee cups because they’re made of paper, are as recyclable as any other forms of paper packaging waste. Many are not. To avoid leaking, some cups are coated with a layer of polyethylene. As a result, the cups are almost never recycled creating a huge problem.

For example, let’s look at Starbucks, the world’s largest coffee chain and a longtime target of CREDO activism against waste. Four billion Starbucks paper cups go into landfills every year because the cups are not recyclable. This is despite the company’s past promises (all broken) to develop a recyclable cup. Recently, in March, Starbucks again promised to develop a 100 percent recyclable and compostable paper cup within three years.

This is good news but until this better cup arrives (if ever) all of Starbucks’ billions of non-recyclable cups will continue to flood landfills and oceans, along with all the company’s non-recyclable plastic cup lids, straws, cutlery, and packaging.

We live in an age of convenience and the price, to be perfectly frank, is the health of our planet. Let’s all spend a little time and effort and seek out less convenient, more Earth-friendly options and do our world a favor.