Mobile payments on the rise?

Will Americans catch up and embrace the digital wallet?

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How to Pay With Your Phone or Tablet

Ready to leave your wallet at home and use only your smartphone to perform all your everyday financial transactions? This is possible with mobile payments, which may actually someday replace most physical payment types like cash and cards.

"Mobile payments" is a big term that can mean everything from paying at restaurants with your phone or swiping your card on your friend's tablet, to transferring money to family or coworkers without needing to physically hand them the cash.

Note: Be aware that some mobile payment services charge fees for transactions. Most are actually free but remember to research the websites mentioned below to be updated on their most recent policies regarding transaction fees.

What Are Mobile Payments?

There are a few different types of mobile payment systems that all work a bit differently. Some might require your phone to be near the other device receiving the payment, like with NFC (near-field communication) payments, while others just use the internet.

Most mobile payment systems can be identified in one of these categories:

Everyday Transactions: One type of mobile payment takes place anywhere you are, like at home. You can open an app on your phone and pay anyone for any reason you wish. Split a bill, send a money gift, refund someone for something they did for you, etc. Money is usually taken straight from your bank account but some services let you hold the cash in a "mobile wallet" for quicker transfers.

Point of Sale Payments: These take place at the place where you're buying the service or good. Lots of stores have POS mobile payment systems in place that make is super easy to just tap your phone on the card reader or press a button on your phone to instantly pay the bill.

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Mobile payments volume in US will triple by 2021: report

Mobile payments volume in the US is expected to total $112 billion in 2016 and grow at 20 percent compound annual growth rate until it reaches $282 billion by 2021, according to a report from Forrester.

The report, Forrester's Mobile Payments Forecast, looked at the volume of mobile payments being made in the US and where they are coming from, analyzing the causes and potential future of the industry. The results should reassure brands and retailers that have felt uneasy about the growth of mobile payments in recent months.

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