NEW YORK ( -- After years of speculation, mobile payments are finally a payment option for some smartphone users with this week's debut of Google (GOOG - Get Report) Wallet.

The verdict: Mobile phones provide daily conveniences for Americans, but flashing a phone at the register may not be any easier than swiping a credit card, and it may provide more risk to the consumer.
The rollout of Google Wallet means owners of Nexus S 4G phones from Sprint can download an app that will allow them to pay for purchases by waving your phone at properly equipped cash registers.

Mobile payments allow consumers to make purchases or transfer money quickly with an app downloaded to a mobile phone. Even though mobile payment systems are available today, plastic cards and cash won't vanish tomorrow. Consumers and retailers will need convincing and incentives to make the switch.

Consumers won't save money by paying with a mobile phone. The same fees and interest rates for consumers and interchange fees for retailers will apply to mobile payments. Retailers are also reluctant to spend the money to buy the equipment necessary to link your cellphone to their cash registers.

Google Wallet is the first mobile wallet entry, but it won't be the last. At least three competing digital wallets (from Visa ( V - Get Report), PayPal and Isis -- a joint venture of AT&T ( T - Get Report) Mobility, T-Mobile and Verizon Wireless ( VZ - Get Report)) are planned for launch this year and next.

Google Wallet will not replace your regular wallet, of course. You will still need a place for your driver's license and credit cards that are not a part of Google Wallet. Google Wallet plans to expand partner banks, but if your bank is not one your options are limited.

Google Wallet is starting with a limited introduction. If you own a Nexus S 4G phone from Sprint ( S - Get Report), you can download a Google Wallet app that will allow you to pay for purchases with Citi ( C - Get Report) PayPass-eligible MasterCards ( MA - Get Report) or a Google Prepaid Card by tapping the phone on a PayPass terminal. Google Wallet can also work on Visa's payWave System.

Tips for using mobile payments
Most of the electronic payment options are tied to credit cards and debit cards, and the same costs will transfer to mobile payments. Purchase protections vary by type of payment, and it is up to the consumer to read the fine print and understand the risks of unauthorized activity or errors on their statement.
  • Tie your payments to a credit card. This gives you the best protections no matter where you make your purchase. Credit card purchase protections, caps on liability and regulations will also apply to a mobile payment backed by a credit card. Under federal law, you are responsible for the first $50 in unauthorized charges after you notify your bank. You also have the right to dispute a charge and the right to charge back an item.
  • Payments linked to debit cards have the same purchase protections and liability as a standard debit card.
  • Avoid billing to prepaid cards. Prepaid cards have more fees than credit and debit cards. They typically cost more and do not have the same purchase protections or caps on liability.
  • Do not bill to gift cards. Gift cards do not offer purchase protections. If you must use a gift card for payment, keep the gift card receipt. If your phone is stolen, contact the merchant immediately to limit your losses.
  • Avoid billing to your telephone account. These accounts offer no protections or caps on liability. Ask your carrier to block third-party charges to your cellphone or landline. Consumers must pay the wireless company for disputed charges even if a report of a disputed amount was made and the report is pending investigation. If you do bill to a telephone company, place a cap on any third-party charges to your phone bill.
  • If you lose your phone, call your cellular carrier immediately to disable your phone. Call your bank or credit card issuer to block access to your accounts.
  • No matter what payment method you use, look carefully at your statements for any charges that are incorrect. Report errors promptly.
  • Send complaints to the Consumer Financial Protection Bureau.
  • Stay within your budget. The easier the payment, the easier it is to make impulse purchases and spend more than you intended.

-- Reported by Bill Hardekopf of

Bill Hardekopf is chief executive of, which compares and rates more than 1,000 credit cards. He is the co-author of "The Credit Card Guidebook."