Apps that make your phone a wallet

Free mobile payment apps keep popping up in the major app stores.  Some apps, like the new Nordstrom Rack app for iOS, work like typical online purchases using a credit card, but with the credit card number stored on a smartphone or tablet.  Some online stores even offer free delivery.

Other apps work with in-store payments by using barcodes, like the Starbucks app. Some apps, such as those from Isis or Google Wallet, use near-field communication (NFC) chips that work with a variety of retailers, mainly on Android phones, or with the iPhone and a special smartphone NFC sleeve. Americans still love credit cards and cash, but payment apps are gaining steam. Here are eight worth knowing about.

Amazon for Tablets app

Amazon is one of the granddaddies of online purchasing and seems to have covered all the bases with several mobile apps. These include the Amazon for Tablets app, available through the Google Play Store (pictured here on an 8-in. Samsung Galaxy Tab).

Existing or new Amazon account holders with a good wireless or Wi-Fi connection can zip through the app, finding and paying for a new book title or electronic gadget, followed up with Amazon's quick delivery. The design of the Amazon for Tablets interface seems to work well on any Android tablet screen size with easy touch navigation and search for a wide array of products.

Amazon app

Amazon first made its Amazon App available in 2011 in the Apple App Store -- early in the mobile purchasing game -- and it now works with both the iPhone and the iPad, with the latest 3.3.0 update posted in March. Some online reviewers have said the app sometimes crashes mid-stream while making a purchase, but it’s hard to evaluate how widespread the problem is.

Browsing and search capabilities are easy, however. Amazon also has a separate Amazon Local app, which first appeared in 2012, that offers daily deals on in-store shopping and services similar to Groupon, but local deals aren’t available in some cities.

Nordstrom Rack app

The full Nordstrom Rack App for iPhone, iPad and iPod touch debuted on May 1, offering up to 70% off popular clothing brands, keeping in line with the brand’s physical stores. The app is similar to what many other retailers already offer with mobile purchases backed by a credit card or PayPal (and in this case, free shipping for orders over $100).

Within the app, you can click on separate screens for Hautelook, a group of exclusive, limited time sales events. With a  separate Nordstrom Rack Alerts App, users can pick out certain brands or styles they like and receive notifications when the items appear in-store.

PayPal app

PayPal, an eBay company, recently updated its mobile payment app for iPhone, Android phones and Windows Phones. The company said it processed $27 billion in mobile payments in 2013. About 1.9 million U.S. merchants will accept PayPal in their stores. The app is activated when a PayPal account holder turns on the smartphone app to pay and tells the clerk who verifies the payment via the store's terminal.

With a payment code, customers can also scan a QR code or use a PIN authorization, depending on the merchant. In a recent blog, PayPal showed cautious optimism toward NFC payments with smartphones in the future but indicated a preference for use of Bluetooth Low Energy beacons in stores to connect to users' smartphones.

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PayPal Here app

Some of the most exciting mobile payments of the future could come via smartwatches and other wearables, with an in-store check-in via Bluetooth Low Energy over a beacon in the store. A video from PayPal shows that future capability from a Samsung Gear 2 smartwatch.

For small businesses and sole proprietors, the separate PayPal Here app can be used to accept credit card payments with a small triangular magnetic-stripe card reader attached to a mobile device -- not all that different from Square's technology. 

Starbucks app

Starbucks made its mark in mobile payments by offering in-store payments from Android and iOS smartphones via barcode scanning. The basic Starbucks app lets you load money from a credit card or PayPal account to a Starbucks account on the phone, with the ability to track purchases and accumulate rewards.

Starbucks also allows users to scan for payments from the Square Wallet app, which takes money directly from a credit or debit card and can be used at other neighborhood businesses. According to one analysis, Starbucks generated $1 billion in smartphone transactions in 2013.

Google Wallet app

The Google Wallet App, initially launched in 2011, can be used on NFC-ready phones for in-store purchases by touching a special PayPass-enabled terminal. Since then, Google has added capabilities to the app, including withdrawals from ATMs and email money transfers.

Many rewards programs for hotels and shops can be paired with the app as well as a physical Google Wallet card. Last year, Google's  Android 4.4 OS introduced support for host-based card emulation, which eliminates the need for a secure element chip in a smartphone, thereby expanding the potential for NFC use in mobile payments.

Isis Mobile Wallet app

Three major U.S. carriers -- Verizon, AT&T and T-Mobile -- formed a joint venture in late 2010 to develop the Isis mobile payment system, which comes with a free app that can be used with NFC terminals at more than 200,000 locations, backed by credit cards from American Express, Chase or Wells Fargo. Certain phones from the three carriers must be used that incorporate a secure element chip, which the carriers say provides an added level of security.

Apple’s Passbook app

The Passbook app could be Apple’s initial play in the broader mobile payments world. Today it allows an iPhone to store tickets, coupons and boarding passes. If paired with Apple’s enormous 800 million iTunes customer accounts, analysts believe Apple could dominate mobile payments. 

The mechanism for payment data transfer could be through low-cost Bluetooth Low Energy beacons, placed at entry points to stores, theaters and sports venues. The beacons could communicate quickly with an iTunes account to authorize a purchase at checkout. But Apple has been treading slowly and evidently recognizes that Americans still love physical credit cards and cash, putting a damper on mobile payment activity even as mobile payment apps proliferate.