A variety of companies, including American Express, Google and Visa, are trying to entice smart-phone devotees to use their phone as a digital wallet. Once you enroll in a program, you may pay for purchases with a credit card, debit card, gift card, bank account or even your mobile-phone account by waving your phone at the register or tapping a reader. American Express’s Serve is available now; Visa’s digital wallet and Google Wallet will be offered soon.
It sounds simple, but what happens if you lose your phone and someone goes on a spending spree? Advanced encryption technology and the password required before you wave are safeguards. But if fraud occurs, the legal protections available vary dramatically depending on how you fund your digital wallet.
If you use your credit card, you have all the protections you’d have if you’d swiped that card -- you’re liable for a maximum of $50 (Visa and MasterCard offer zero liability). With payments linked to debit cards and bank accounts, you have a $50 liability if you report a problem within two days, and the same zero-liability promise from MasterCard and Visa. Pay with a prepaid card or gift card, or charge the purchase to a mobile-phone bill, and you’re on the hook for purchases made up until you report a problem.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
For more protection, many banks will alert you to transactions that take place without a card swipe. You can also set dollar limits on purchases, and install software that lets you erase your phone’s memory remotely -- just in case you lose your digital wallet.
-
Costco’s 4.5-Pound Tiramisu Cheesecake Might Be Your New Favorite DessertIf you haven’t visited your local Costco bakery to check out the Kirkland Signature Tiramisu Cheesecake, you'd better get there early, they are flying off the shelves.
-
TaxAct Review: Pricing, Features and What to ExpectTaxAct offers basic tax prep tools with competitive pricing. Understand its features, limitations and how it compares to similar software.
-
How to Guard Against Identity Theft in 2025Scammers are getting better at impersonating legitimate businesses.
-
Roth IRA Contribution Limits for 2025Roth IRAs Roth IRA contribution limits have gone up. Here's what you need to know.
-
Four Tips for Renting Out Your Home on Airbnbreal estate Here's what you should know before listing your home on Airbnb.
-
Five Ways to a Cheap Last-Minute VacationTravel It is possible to pull off a cheap last-minute vacation. Here are some tips to make it happen.
-
Social Media Scams Cost Consumers $2.7B, Study ShowsScams related to online shopping, investment schemes and romance top the FTC's social media list this year.
-
How to Figure Out How Much Life Insurance You Needinsurance Instead of relying on rules of thumb, you’re better off taking a systematic approach to figuring your life insurance needs.
-
Amazon Big Deal Days Is Coming! We’ve Got All the DetailsAmazon Prime To kick off the holiday season with a bang, Amazon Big Deal Days runs Tuesday, October 8 and Wednesday, October 9.
-
How to Shop for Life Insurance in 3 Easy Stepsinsurance Shopping for life insurance? You may be able to estimate how much you need online, but that's just the start of your search.
