If the pandemic didn't put the final nail in the coffin for paying with cash, then it certainly opened up the field for other forms of payment to flourish, especially ones requiring no contact.

"The coronavirus pandemic has fuelled the trend towards cashless and contactless payment - and with it mobile payment," explains Kevin Hackl, a banking expert at the German digital association Bitkom.

Lots of options

If you'd prefer to pay with your smartphone instead of a card or cash, you'll first need an app - of which there seems to be a million. It can be a bit confusing, as smartphone manufacturers, certain shops and traditional banks all offer the ability to pay through their apps. And then there's Google Pay and Apple Pay.

The apps usually ask the customer to enter their credit or debit card data. If you don't have that, you'll need to find a provider that also accepts the details of a checking account or a PayPal account.

NFC or QR

"In Europe, NFC technology is most commonly used," says Markus Montz, a digital expert at the c't trade magazine. That involves a chip in the smartphone that can wirelessly send data to a merchant's device during a transaction. These chips can also be found in cards that allow contactless payment. NFC is indicated by a wireless symbol.

Some apps reply on a QR or bar code instead of NFC. "The app generates a code on the smartphone when it's time to pay, which a staff member at the checkout scans with a reader," explains Montz.

More security than you think

Most people who have not yet dipped their toe into mobile payment have concerns about how secure it is. However, technically speaking, it's actually a little more secure than using a physical card, as the card number if not stored on the device, according to Hackl.

If the smartphone is unlocked with a fingerprint or face scan, then the card stored on it is assigned specifically to that user.

"For the NFC system, the chipset transmits a transaction code, a so-called token, instead of the saved card data, that can be used only for that one purchase," according to the digital expert.

A QR or bar code can also only be used one time.

It's also hard to read the NFC chipset in a smartphone without authorisation; when the screen is off, generally so is the chip.

Data privacy depends on the provider

But: "The merchant knows only the transaction number of the payment procedure," says Hackl. As far as the other data goes, that depends on the app provider. For apps specific to a retailer or supermarket, for example, customers share information about their purchasing behaviour by using the integrated mobile payment systems. In return, they will often be offered discounts or special offers, says Hackl.

On the other hand, Apple Pay receives no data. "The company receives a share of the fees that merchants pay to payment services providers, as does Samsung Pay. So these companies don't need the data for their business model," according to Montz. Google, however, take a lot of liberties in its terms of service; it doesn't know exactly what's on the user's receipt, but it does know their location, for example.

Limited by your smartphone

Another factor into which mobile payment service provider you should go with depends on your smartphone: iPhone owners don't really have any other choice besides Apple Pay as the manufacturer doesn't allow other NFC apps. However, most banks have a partnership with Apple.

Android users, on the other hand, have a plethora of choices: there's the app favoured by their smartphone manufacturer, one from their bank, Google Pay, or any made specifically for a preferred retailer.

 - dpa