NEW YORK - Wireless? Bar codes? In this mobile age, what's the best way to pay with your phone?
Apple Pay has received much attention in recent weeks, but there are lots of other mobile-payment systems. Google Wallet uses a similar wireless technology. Starbucks and Dunkin' Donuts have apps that generate bar codes for their stores. A phone case called LoopPay mimics the signals produced by card swipes so you can pay with your phone just about anywhere credit cards are accepted - at least in theory.
With Apple Pay, the phone unlocks automatically when you hold it near the NFC (near-field communication) reader on the merchant's payment system. You're then prompted to scan your fingerprint to authorize the transaction. Google Wallet isn't quite as fast, as it requires a pass code.
Some big merchants, including Wal-Mart, CVS, Rite Aid. and 7-Eleven, are developing their own systems based on bar codes. Some have even disabled their NFC equipment in the meantime. Their system, CurrentC, is expected to debut next year. For now, bar-code payments tend to be made through apps for specific stores, such as Starbucks.
Here's a look at various mobile-payment options:
Apple Pay. This NFC system from Apple Inc. has gotten the bulk of the attention - and for good reason. It's easy to set up and use, and it works with a variety of credit and debit cards. Beyond paying at stores, you can use Apple Pay to make online purchases within apps without having to re-enter your billing and shipping information.
Pros: It's secure because your number isn't stored anywhere. It uses a substitute number that hackers won't be able to do anything with unless they also have your phone and your fingerprint.
Cons: Some cards don't work yet. And you have to pony up for the latest Apple device: In-store payments require an iPhone 6 or 6 Plus. App payments work only with those phones and the latest iPads.
Google Wallet. This service was one of the first to use NFC. However, Google Inc. had trouble getting credit card issuers to support Google Wallet. Now, Google essentially creates a MasterCard debit account on your behalf, and your regular card is charged on the back end. Unlike Apple Pay and its fingerprint ID, Google Wallet requires stopping to enter a pass code.
Pros: With few exceptions, it doesn't matter which card you have.
Cons: It works only with some Android phones and tablets. Not all vendors accept MasterCard debit cards. You might lose out on some rewards and other benefits your card offers because the transaction is indirect.
Softcard. This NFC system was developed by three of the leading wireless providers: Verizon, AT&T and T-Mobile. Unfortunately, it works with so few cards that the most practical way to use it is to set up a prepaid account, defeating the purpose of having a "credit" card.
Pros: Apps are available for Android and Windows devices.
Cons: It works with few cards (American Express, Chase and Wells Fargo only).
LoopPay. You tap your phone similar to NFC, but this system actually reproduces the signals from a magnetic swipe, so it should work with existing equipment.
Pros: It works with more cards and merchants than other mobile systems.
Cons: You need to buy hardware, such as a phone case with the LoopPay transmitter in it. It has trouble with some older readers, as well as transit fares, parking meters and other machines that require you to fully insert a card, like a bank ATM. Under LoopPay's default settings, someone can go on a shopping spree if your phone is lost or stolen.
PayPal. There are several ways to pay with PayPal's app. For food, you typically order a meal for pickup or delivery and pay online ahead of time. For retailers that accept in-store payments, you typically authorize that merchant on your app, and the merchant chooses your photo after it appears on the cash register. In a few cases, you provide your phone number and PIN at the retailer.
Pros: You can make payments through your bank account, not just cards. You can also send money to friends.
Cons: It's confusing because different merchants require different methods of completing the payment. Few accept in-store payments.