Why digital payments are more than just a gimmick

How many of you have experienced this: you pull up your credit card statement online, and immediately notice some transaction you don’t recognize?

This has happened to me a few times, and I know I’m not the only one. Sometimes when that happens, it could be that it’s something you really did buy, and you just forgot about it. Again, yours truly is guilty of that.

Other times, though, try as you might, you just cannot remember buying something from some store in Sweden (or wherever). So, you call your credit card company and dispute the charge.

Fortunately (or unfortunately, depending on how you look at it), credit card companies are well-equipped to handle this situation – because it happens frequently – and that’s the unfortunate part.

It’s nice that credit card companies are so easy to work with on this sort of thing, but wouldn’t it be even nicer if you didn’t have to make that phone call in the first place? Truthfully, I’m not sure we can ever fully eliminate fraudulent charges, but the more measures we can take to lessen them, the better.

Don’t swipe – wave!

To be perfectly honest, I’ve known about digital payments, or “paying with your phone” for a while, but for a long time, I never really felt they were all that valuable.

What I have known is that I don’t like paying with cash very much anymore. I just hate fumbling around with paper bills, and worse still, having a growing collection of coins that only ever seems to lessen if I turn it in at the bank. Meanwhile, I can’t use the money those coins represent.

When it comes to paying with my phone, though, I’ve long been sort of indifferent. Credit cards are easy enough to handle, and I always carry my wallet with me anyway, so I have never found them to be all that cumbersome in the way cash is.

Now, it just so happens that my Chase Freedom card’s 5% cash back category for Q1 2018 included payments through Google Pay (and I believe Apple Pay as well, though I am an Android user personally).

All you had to do was link your card within the app, and anything you paid for using the app earned you 5% back. Needless to say, I jumped at the opportunity. Google/Apple pay aren’t accepted everywhere, but they are accepted at many stores, and that list is only getting larger.

Sharing isn’t always caring

The 5% cash back was cool enough, but of course that wouldn’t last. However, because I decided to give the app a go, there was one critical piece of information I discovered – these apps never share your card number.

The app “knows” your card number, but the transaction is charged to the app itself, so the retailer doesn’t need it. So, essentially, you are adding yet another buffer when your card was already something of a middle man between you and your bank account.

That doesn’t mean your account couldn’t be hacked in other ways, of course. But if you’re using the app, it should certainly eliminate the “sniffing” scams that have victimized many people in the past.

Other benefits

Not sharing your card number is easily the biggest benefit in my mind, but there are a few others as well. That may vary by app, but with Google pay for example, you can also add in loyalty cards. So for example, I have my Walgreens loyalty card added, meaning I can also earn points on that card when I make digital payments.

Another benefit is sending and receiving money. There are already other ways to do this, such as through Paypal, but I personally like having things as centralized and simplified as possible, and I don’t think I’m alone in that feeling. As Google mentions, it’s great for “going halvsies” on a pizza with your friends.

I will definitely be using digital payments more in the future, and hopefully you found this little tidbit useful. I know I am always looking for ways to make my finances more secure, as that can only help in achieving financial independence.

2 thoughts on “Why digital payments are more than just a gimmick

    • Bob says:

      Hey Nick, thanks for the positive feedback. And yes, you get your rewards points all year round. When you add your card to Google Pay (and, again, I assume Apple Pay as well), it works exactly like it would if you were paying with your good old plastic card. You get exactly the same benefits. Hope that helps.

      By the way, since you commented, I am subscribing to your blog right now!

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