Paying without cash or a card

Posted by Josh Conibear in Personal Finance on 7 February 2014 - Josh worked as a Credit Analyst at checkmyfile until 2014

The concept of paying for goods with a mobile wallet may still be an idea of the future, but a cashless and cardless World really is on the horizon.

The niche market for using your smartphone to purchase goods is becoming a reality, empowering the user to make purchases in-store, paying back a generous pal, and even transferring money abroad, all with the touch of a phone.

So what apps and tech should you look out for in 2014?

PayPal

The biggest facilitator of online payments, PayPal processes in excess of $300 million per day. With apps on all major smartphone platforms and a mobile-friendly website (as well as a separate card reader and merchant products), PayPal is the most established mobile payment service.

Although PayPal’s main selling point – sending money to someone using just their email address – still works exactly as it always has, but has a reputation for hit-and-miss customer service, charges higher fees than challenger services and is beginning to make the poster child for mobile cash look a little over the hill.

That said, PayPal is still leaps and bounds ahead of most financial institutions with its new fully-native checkout service for merchants.

GoCardless

Ostensibly a no-nonsense system for collecting recurring fees, the UK only company GoCardless is a great way to collect one-off payments, with flat fees of 1%, capped at £2.

As the name might suggest, GoCardless is all about ditching credit cards altogether by relying on the Direct Debit system to power payments. Payers simply provide their bank account details and the payment will be sucked from their bank account and into your own.

There’s no mobile app, but the responsive forms throughout the site ensure that you’ll have no problem arranging payments from a smartphone browser with no plastic involved.

TransferWise

Jetsetting type with friends littering the globe? Clever crowd-powered currency swappers TransferWise will not only charge you much lower fees than a bank, but will give you a much better exchange rate too.

This financial sorcery is actually deceptively simple – when you make a transfer, the money never leaves its country of origin. Your deposit is matched with another in your recipient’s country, and sent out domestically.

A usability dream, TransferWise’s mobile site will have you flinging payments around the globe in minutes.

Your bank of choice

With almost every bank now sporting a mobile app of its own, you no longer need to go in-branch or use ATMs to make transfers. Barclays in the UK has a dedicated app, Pinglt, to take care of simple money transfers between individuals.

Going shopping? Then try these options for size.

Square

If PayPal is the granddaddy of online peer-to-peer payments, Square is surely the grandmomma of card-reader dongles. Effectively turning your iPhone or iPad into a cash register with a tiny card reader inserted into the headphone jack, Square is the progenitor of similar products from Verifone, Groupon and even PayPal.

Now processing tens of millions of dollars per day, Square has branched out into entirely cardless payments, allowing customers to settle up simply by checking-in at the store via the Square Wallet app. When they check out, the cashier confirms their identity and the Square payment system handles the rest.

Google Wallet

The US-only option and the only contactless-powered app, Google Wallet does just about everything you might want from a mobile wallet app. Pay by tapping your phone at the checkout, send money to friends with just an email address; you can even order a plastic card that will let you withdraw your Google Wallet balance from ATMs, something to look forward to in the United Kingdom.

TabbedOut

Built specifically for use in restaurants and bars, TabbedOut allows you to pay with your smartphone at any establishment that supports the app. You can see your tab in real time, add a tip and even split the bill.

TabbedOut also interacts with merchants – you can leave feedback , sometimes for vouchers towards your next visit. You can see your tab in real time, add a tip, and split the bill.

The question is, who will win out? O2 the mobile giant has had to axe its mobile wallet service less than two years in, displaying the difficulty of maintaining a profitable payments business in current economic times.

But the options are there for us to try right now.

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