Can Paying With Your Phone Save You Money?

The concept is a bit mystical, a little unsettling, and no doubt a glimpse into the world to come: shopping without any cash or credit cards, just a smartphone. It's possible already at thousands of stores, via mobile payment apps that let you make purchases with your phone. It can be as simple as scanning a barcode on the screen, tapping your device on a receiver at the register, or even just stating your name. These services raise a lot of questions, and of course, being Cheapism, we couldn't help but ask this one: Can any of them save you money? Let's take a look at some of the top players.

Google Wallet.

Google's system is limited by the fact that you need to own a select Android device in order to download the payment app. However, Google Wallet is accepted at hundreds of thousands of merchants, including many big names. To make a payment with your phone, you simply hold it against a payment terminal at the register. Google Wallet offers deals such as 15% off a purchase and exclusive offers such as $2 smoothies at Jamba Juice. You can also link a store's rewards card to your Google Wallet account to collect points while you shop.

Pay With Square.

You may have heard of Square's eponymous card reader, or even come across one of the 300,000-plus merchants who attach the small device to an iPhone, iPad, or Android phone to accept credit card payments. Square has also released a consumer-facing payment app called Pay With Square, which lets iPhone and Android users make purchases simply by stating their names. Participating merchants can see your profile picture when you check in using the app and match the photo to your face when you arrive at the counter. The network of merchants is growing and a recent deal with Starbucks means you'll soon be able to pay for a venti latte without your wallet. Some Square merchants offer first-time-customer incentives and punch-card-like rewards.


On the merchant side, PayPal Here is markedly similar to Square: A triangular card reader attaches to a mobile device, allowing just about anyone to accept credit card payments. Participating merchants can identify customers who check in on their phones using the PayPal app so they can complete a purchase with PayPal. With the company's in-store checkout service, you don't even need to have your phone with you to make a purchase. Just enter your mobile phone number and a PIN you set up in advance. PayPal automatically applies any offers or coupons during the transaction. PayPal has focused on an initial group of national retailers such as Home Depot but will expand to millions more next year, thanks to a recent deal with credit card issuer Discover.


LevelUp is a payment system supported by more than 3,000 U.S. merchants so far. The payment app lets consumers make purchases using an Apple, Android, or BlackBerry device and rewards loyal customers with credit toward future purchases. The merchant scans a unique QR code displayed on a mobile device to charge a linked credit card. LevelUp gives consumers a few bonus dollars to spend on their first purchase at each merchant and rewards repeat business with more credit.

Often the reward amounts to 10% back -- $2 of free credit after you spend $20, for example.

Our Recommendations.

Given the number of merchants signed up and compatibility with both iPhones and Android devices, Square has perhaps the most convenient payment app. However, LevelUp looks like the best choice for consumers willing to try paying with their phones to save money. The company's founder told Business Insider that 98 percent of participating merchants run promotions. If you do decide to use LevelUp, make sure you search for a promo code that will start you off with a little bit of extra free credit. And be wary of the pull that rewards can have on your spending habits. It doesn't make sense to go out of your way to spend $20 somewhere just to get $2 of credit.

These services also disconnect you from a physical method of payment such as cash or even a credit card, making it easier to spend without thinking. Pulling out a bill does take a little extra time, but having to look President Jackson in the face before handing him over may not be a bad thing. Although these payment apps don't store credit card information on your phone, and you are protected by credit card fraud protection, we suggest you create a PIN when possible for a bit of extra security.

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