CreditCards.com tested three of the most popular mobile wallet systems out there today: Google Wallet, PayPal and Square Wallet. While all three have similarities, Square Wallet came the closest to replacing that overstuffed wallet.
Forget about your wallet. More and more people are using their mobile phones to make purchases. Mobile payments are predicted to reach $617 billion worldwide by 2016, according to Gartner Research. So how does it work in the real world? We had first-time users try three of the biggest names in mobile wallets – Google Wallets, PayPal and Square Wallet -- to see how they work. STEP 1: SETTING UP THE ACCOUNT Andrew Mambo tried PayPal on an Android phone. “I’d already used PayPal before and had it linked to one of my credit cards, so all I had to do was link the app to my PayPal account,” says Mambo. Krishna Mayala signed up for Google Wallet, which is only available on certain models of Android phones. “Once I was actually able to download it and have it on my phone it was fairly straightforward to use it, but you have to set up a Google wallet account first online,” says Mayala. And CreditCards.com downloaded Square Wallet for iPhone. Getting set up was simple. We just signed up for an account and added a credit card. STEP 2: SECURITY Basic security procedures are similar for all three of the systems we tested. Each asks for a photo to help identify who is making the purchase. Only the last four digits of your credit card are shown, and no information is stored on your actual phone. “Protection is about what you put into it and how you feel about it,” says Mayala. “You give your credit card to waiters every single day and who knows what they're going to do with it, right?” STEP 3: FINDING MERCHANTS THAT ACCEPT THE APP: All three mobile wallets we tested use the phone’s GPS to find merchants. Square and PayPal make it clear which ones accept the app. Google Wallet -- which runs on MasterCard's PayPass network -- posed the biggest challenge. Mayala found a listing for a merchant called All Good Things through Google Wallet but when he followed the accompanying map, the retailer was nowhere to be found. He had more success with a retailer called Pamper Your Pets. All three transactions took mere seconds. Google Wallet is tap-to-pay, employing a special chip in the phone and the merchant’s reader. For Square and PayPal you give your name to the cashier and your picture comes up on the register to confirm your identity. Our experience with Square Wallet was the most seamless. While PayPal and Google took minutes to confirm the transactions, Square’s receipt came through in real time. Plus, it gave the option of adding a tip during or after making the purchase. And with a built-in loyalty card, it comes closest to replacing that overstuffed wallet.