If you haven’t heard of or aren’t already using a mobile wallet to pay for things, I hate to say it, but you’re behind. Not “writing checks at the grocery store” behind … but definitely “still listening to CDs” behind. Mobile wallets have been here for a while, and their prevalence will only increase.
What is a mobile wallet? It's a mobile device app that stores payment card information and can be used for payment at merchants that accept this form of payment. Popular examples include Apple Pay, Samsung Pay, and Google Wallet.
As with anything that lives at the intersection of new + technology + money, lots of people are still wary of and hesitant to store payment card info in their phone. Their common worry: losing their phone or getting hacked. In reality, using mobile wallets for payments is actually more secure than carrying a physical card. Let’s look at why.
Your phone has built-in security features
One great smartphone feature is built-in biometric (fingerprint or facial recognition) security features. Your digital wallet uses these features to verify you are the one using your phone to make a payment. Biometrics also protect your photos, contacts, and the information stored on your phone. But in the case of digital wallets, it really doesn’t matter because of the next point.
Your card number isn’t stored in your phone
When you make a payment, your credit card number isn’t transmitted to the merchant. Digital wallets use a device-specific number — aka token — and a unique transaction code. This “tokenization” not only makes transactions safer, it means that even if a talented hacker gets past your biometric security features, your credit card number isn’t on your phone for them to find and use. It also means that if someone tried to capture the payment info during the transaction or by hacking the merchant, they wouldn’t get your credit card number because it’s never transmitted.
How mobile wallets benefit schools
While consumers benefit from the built-in security of tokenization, there are also enormous benefits for schools that accept digital wallet payments. First, should your school’s system be breached by cybercriminals, tokens have no real value because they don’t contain actual card information that can be used for fraudulent transactions. According to the Payment Card Industry Data Security Standard (PCI DSS), tokenization is one of the most effective ways to minimize the scope of your PCI compliance.
Digital wallets can also act as electronic replacements for student IDs. Schools that make this transition enjoy:
- Access to declining balance accounts associated with meal plans and other campus card programs.
- Myriad benefits associated with a cashless campus, such as seamless student experiences and less cash on hand at high-volume events.
- Access to analytical data that can drive student retention and engagement initiatives.
Beyond convenience and security, school-specific wallet apps can also be configured to include functionality such as auto-recordable class attendance, residence hall and campus building access, or digital library material access based on a student’s class schedule.
Acceptance begins with understanding
While a majority of schools have long-term plans to adopt digital wallet technology, only a few have actually made the switch. Most of the hesitancy can be attributed to security concerns, uncertainty around new technology, and the cost of upgrading point of sale hardware. If you’re experiencing resistance to adding mobile wallets to your school’s tool kit, share this information to jumpstart the conversation.
Senior Manager, Product Strategy
John McElroy is a Senior Manager for Product Strategy at TouchNet. In his role, John is responsible for guiding product strategy, pricing, research, and technology requirements. John began his career with TouchNet in 2002 as the original Product Manager for Payment Gateway and Marketplace. John also guided the initial implementation and rollout of TouchNet's PayPath Service. John spent several years as a Regional Sales Manager before moving into his current role. Prior to TouchNet, John worked for UMB Bank, US Central Credit Union, and Nescrow Technologies, always focused on payments. John is a graduate of the University of Missouri, Columbia.