5 On Your Side

Robust payment-app market trims wallets in cashless future

Posted 8:54 a.m. Thursday

In the age of smartphones and internet connectivity, tangible cash might be taking a hit.

Almost half of all people walk around with less than $20, and some of us carry no cash at all.

Most people ditching cash are instead opting for their smartphones, whether for a mobile wallet or a merchant app. These days there are so many other ways to pay.

For people like Rachel Hook, there's not much cash in her wallet.

"I don't use cash or checks," Hook said. "Actually, I don't even have a checkbook or cash."

She uses an app on her phone to pay for virtually everything, including her share of groceries to her roommate.

"Credit and debit cards are still important cashless players, but new technologies are pushing us to abandon paper money entirely," said Consumer Reports' Margot Gilman.

One of those technologies is electronic toll road tags. Those tags are used by 37 million people.

Or maybe you use a mobile wallet––such as Apple Pay, Android Pay, PayPal or Samsung Pay—or a person-to-person payment system, such as Square, Popmoney, Facebook Payments in Messenger, or Venmo –– to split the check, or pay the babysitter or a tutor.

Branded apps from companies including Starbucks, Walmart, Uber and Dunkin' Donuts make it easy to pay and build customer loyalty for the merchants.

But there are potential down sides.

"Mobile payments can generate a mountain of digital data that can tell lots about us that we may not want people to know," Gilman said.

All that data can be an irresistible target for cybercriminals.

"Hackers can be relentless," Gilman said. "So, consider connecting any technology to a credit card rather than your bank account. You might incur some fees, but you'll be afforded the same protections as if you used the credit card itself."

Credit card protections make that cashless convenience more secure than you might think.

More changes are coming, too: New cashless technologies of the future will let you make payments with just your fingerprint. Another app is in the works that will let you scan merchandise and pay for it as you walk through the store—you'd never need to go to a cash register.

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