Home / Credit News / Some question whether consumers will benefit from mobile wallets

The last several months have seen new systems that allow consumers to make purchases using their smartphones rolled out by companies in several industries. Now, though, some experts are noting their concern for how they might affect consumers' finances.

Mobile wallet systems work by having consumers load their payment information into a smartphone embedded with near-field communications technology, then use that as a means of making a purchase instead of swiping their card the old-fashioned way. That physical disconnect might be problematic for some, according to a report from the Hartford Courant. A recent study by MasterCard found that there will be as many as 150 million mobile wallet-capable devices in the U.S. within the next five years, and that consumers who currently have this payment option tend to spend 30 percent more on it than with traditional cards.

"The easier it is to buy, the more some people will spend," Sheryle McMillan, regional director of education and community relations at Money Management International, told the newspaper. "Technology is making it more challenging to keep track of spending. When you can buy things instantly, there's no time to think twice about whether or not you actually need the items or how the purchase is going to affect your budget or drive up your credit card debt."

Experts also worry about how these programs will keep track of consumers' shopping habits, as most will allow participating merchants to send users targeted advertisements and deals, which can lead to more spending, the report said.

However, some mobile wallet developers are also working on ways consumers can keep better track of their spending with these programs. This can include having the ability to place caps on certain types of spending within the application itself, or otherwise give users more information about the amount they're spending in specific categories so they can see just where their money is going.

Mobile wallet systems have also been criticized for their security, but experts say those concerns are unfounded. If anything, the way in which digital wallets encrypt and store payment information is more secure and up-to-date than protections on traditional cards, the technology for which hasn't changed in decades.