60 second guide to mobile paymentsHow to turn your phone into a mobile wallet

24 June 2012

Barclaycard PayTag

Barclaycard PayTag adds a contactless card to your phone

Recent technological developments have made it easier than ever to pay for things using your mobile phone, with smartphones and downloadable applications turning your mobile into your wallet. 

In February 2012, Barclays launched its Pingit app, which allows you to transfer cash needing only someone's mobile number. Since then, the likes of O2, Paypal and the Post Offices have launched services to help you pay with your phone. 

With this in mind, Which? explains how mobile payments work and what's on offer to help you spend on the move. 

What are mobile payments?

Mobile payments allow you to use your mobile phone (which usually must be a smartphone) to send or authorise payments from your bank account. This technology enables you to carry out bank-to-bank transfers using just your mobile phone details (through Barclays Pingit and O2 Wallet, for example) or to make purchases by tapping your phone against a special reader.

How do Pingit and O2 Wallet work?

Barclays Pingit was launched in February 2012. It's an app that allows smartphone users to receive money (up to a maximum of £5,000 per day) and send money (up to a maximum of £300 per day) to anyone with a UK current account and registered mobile phone number – simply by using their mobile number. The app is free to download, and available on iOS, Android and Blackberry.

The O2 Wallet service, launched in May 2012, allows users to transfer money (up to a maximum of £500 per day) to any UK mobile phone number and also provides a prepaid O2 Money Visa contactless card.

Can you make payments by tapping or swiping with your mobile?

The ability to use your phone as a contactless debit or credit card became possible in May 2011 with the arrival of the Quick Tap payment app, developed by Orange and Barclaycard, and using a Samsung Tocco handset. Users need to top up their account from a connected credit or debit card, and can store up to £150.

In April 2012, it was announced that the Quick Tap system is being opened up to other Android phones, and all UK credit and debit card account holders will be able to use the service. McDonald’s and Pret a Manger are among the 70,000 outlets that now accept this technology – the same as for contactless cards (see below). The maximum single payment amount increased to £20 in June 2012.

Quick Tap is the first example of phones using near-field communication (NFC) technology to be able to authorise payments. It is expected that more phones will include NFC technology in the future, increasing the number of people who can use this type of payment.

What are contactless cards?

Contactless debit and credit cards have been around for a bit longer (introduced in 2007), and allow cardholders to tap their card against a reader to confirm a payment without having to insert their card and enter a Pin for confirmation. 

There are currently around 15m contactless cards in circulation in the UK, with HSBC and NatWest among the providers which are currently replacing existing cards with contactless cards.

Barclaycard unveiled a slightly different take on the contactless card with the launch of the PayTag in April 2012. This is a mini stick-on credit card, designed to be attached to a mobile phone and used at contactless terminals in the same way as contactless cards.

How secure are contactless cards? 

There have been some security concerns about contactless cards over recent months. In March 2012,
a Channel 4 News investigation found that you could adapt mobile phones in order to swipe data from a chip on Barclays-issued Visa contactless cards.

However, the only information which can be obtained in this way is the same as that printed on the front of the card (not the Pin or signature code). Barclays has been keen to stress that all transactions are covered by its fraud protection guarantee.

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