How To Pay By Phone (And Avoid Risks)

As tech changes, we are increasingly being nudged by our banks to pay by smartphone. And it’s not just the banks. Apple, Google and PayPal all want us to use our phones to pay our friends, family and stores rather than use cash.

But what do you need and what are the risks?

In Spain 77% of people have made a purchase at least once from their mobile phone or tablet (data from 2017). The main reason is the ease of use via apps, such as to hail a cab or order a take away for dinner. Even paying for city parking is now done via app rather than searching for loose change in your pocket.

Main Financial Transactions

There are 3 main ways that you can use your phone to carry out a financial transaction:

  • To transfer money between people. For example, if you’re out for lunch with friends and need to split the bill, there are several apps, or bank apps, that help you do this immediately.
  • M-Commerce (mobile commerce): buying (and selling) online.
  • Pay by phone at a POS (point of sale) in a store. In other words, instead of using your credit or debit card you just place your phone on or near the terminal.

What Do You Need?

  • Download an app. This could be your bank’s app or use Apple Pay, Google Pay, Samsung Pay or PayPal. Other apps for payments between friends and colleagues are also available.
  • NFC (near field communication) enabled on your phone. Select from either in the drop down menu or in settings.
  • If paying in a store, the POS terminal must accept payments by mobile phone. Some smaller stores may still have an old terminal that only accepts card payments.

What Are The Risks?

As with all tech you need to take care, but more so when dealing with your financial data. Watch out for the following::

  • Weak passwords. Yes, remembering so many passwords is a pain, but you need to protect your money. Choose a password combining upper and lower case characters, numbers and symbols.
  • Unofficial apps. Only use a safe trusted platform (Apple App Store or Google Play) and/or download apps from official bank sites. An unofficial app could install a virus on your phone and potentially expose all your financial data to scammers.
  • Using public WiFi. Once again, you risk hackers gaining access to your money.
  • Loss/theft of your phone. Make sure you know how to block access (from another computer or phone) as soon as you realise your phone has disappeared.

More Tips

Remember to monitor your credit card or bank transactions regularly to check for any suspicious charges. This is not only a good idea for when using your smartphone to pay, but also for your physical cards too. Hackers access personal and financial data via large company databases, but those affected only tend to find out months after the security breach.