Your smartphone can now serve as your credit card

MasterCard and PayPal are jumping on the bandwagon by offering their own mobile wallet apps

A new technology that enables smartphones to serve as 'credit cards' with the help of mobile wallet apps is being offered.

The latest innovation of 'mobile wallets' for credit card payments is now on rise, with major payment processors like MasterCard and PayPal jumping on the bandwagon and offering their own mobile wallet apps.

The new innovation eliminates the plastic covering of the phone and turns it into a digital payment portal, Fox News reported.

Credit card companies and retailers seem to be banking on consumers finding the swiping and signing process far too time-consuming and tedious, and they are trying to see a future in contactless payments.

Retailers will have to scan a bar code on the phone. Consumers may tap their device on a reader or they may do nothing at all as the register and phone communicate automatically using 'near field communication' technology.

Regardless of the method, consumers are often free to go their way without swiping a card, entering a PIN or signing a receipt.

However, while mobile wallets can be convenient, they are limited by the number of retailers who are equipped to accept payments via the near field communication technology used by many apps, the report said.

A recent survey conducted by the Carlisle and Gallagher Consulting Group found that over 48% of respondents expressed interest in mobile wallet technology.