Hidden Costs of Cell Phone Wallets

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Last updated April 12, 2019

The idea that the cell phone will be replacing the wallet for the great majority of consumers has been big news in recent months, with businesses racing against one another in order to be the first to bring out payment systems that will enable customers to carry out transactions with their cell phones and eliminate the need to carry either cash or credit cards on their persons.  However, experts are warning that the new trend could carry with it some serious drawbacks for the unwary.

Consumer Reports says that of all the information that is emerging about the various cell phone wallets and digital services that are available or in development, one of the least mentioned is just how much these services are going to end up actually costing the average consumer.  Perhaps even worse is that very little is known so far as to how much – if any – protection consumers will be given against charges made that are either accidental or possibly even fraudulent.

Already, no less than one in four customers in the United States are reporting some kind of billing error over the course of the last 12 months.  “A consumer’s right to get their money back when something goes wrong – errors, goods not delivered as promised, fraud – varies by the payment option used,” Consumer Reports said in a statement.  “There is a large disparity in protection for services that link to prepaid debit cards and direct billing to consumers’ phone bill.”