6 Mobile Payment Tools You Should Start Using Today

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It's not just a silly myth from a "Seinfeld" episode — sitting on your wallet can actually cause sciatica problems.

When your wallet is ever-growing due to a severe case "credit-carditis," it's time to consider alternative forms of payment. Here are six mobile payment tools that can help you trim the size of your wallet, while providing some additional financial benefits.

1. Square

Close to 50% of Americans carry $20 in cash or less each day. Even worse, 9% of us don't carry any at all. This explains why your friends and co-workers seem to never have cash on hand when it comes to paying you back.

That's why you may want to sign up for Square to process credit card payments through your Apple or Android device. You'll receive a credit card reader for your device free in the mail, and you'll be ready to improve your chances of getting back those small loans from your friends. Keep in mind that Square charges a 2.75% fee of the total amount per swipe.

2. PayPal

The first fully digital payment option has been around since 1999. Through the years, PayPal has built great partnerships with several online retailers. In 2013 alone, PayPal processed $180 billion in 26 currencies throughout 190 nations. Freelancers and entrepreneurs often choose PayPal for sending and receiving payments over the web, because most of the time funds are immediately available.

Keep in mind that the typical PayPal transaction gets dinged with a 2.9% plus $0.30 fee. For example, if you receive a $100 payment on PayPal, you only see $96.80 in the end. That's $3.20 of every $100 that goes to PayPal.

PayPal also offers some other useful services:

• PayPal Credit has special financing offers, such as no interest for six months and 1% cash back on applicable purchases.
   
• An alternative to Square's card reader, PayPal Reader charges 2.7% per swipe in the U.S.
   
• Several brick and mortar retailers, such as Home Depot and Babies "R" Us, accept your PayPal login credentials at their payment terminals.

3. Venmo

A mashup between personal finance and social media, Venmo is a popular mobile payment smartphone app among Millennials. To start with Venmo you just need a Facebook account or email address, and you're ready to receive money from any other connected Venmo user. If you would like to send money, you just need to connect your bank account to your Venmo profile.

Venmo has two major advantages. First, the service charges no fees to process payments between users. Second, unlike other mobile payment options, withdrawals from Venmo to your bank account are processed within one business day.

Not into oversharing on social media? You can still use Venmo, since you can adjust the message settings so that transactions are private. However, most Venmo users keep their settings public. Sharing inside jokes, emojis, and snarky comments is part of the Venmo experience. IMHO, that's pretty cool.

4. Bitcoin

Created by an unknown person using the alias Satoshi Nakamoto in 2009, Bitcoin is a virtual currency that allows people to make online payments anonymously. Using digital wallets, which can be a mobile, desktop, or online app, users can share Bitcoins with each other.

Unlike other virtual currencies, Bitcoin is a cryptocurrency. This means that Bitcoin leverages cryptography to secure transactions and to control creation of new units. People can't just make up Bitcoins out of thin air. Not only does it take a lot of hard work to make Bitcoins (a process called "mining"), but there is also a cap on the amount of Bitcoins that can ever be produced. (See also: Here's What You Should Know About Bitcoin)

Just like any other emerging technology, Bitcoin is not for everybody:

• It has had some major market value swings. Back in November 2013, the market value of a single Bitcoin was over $1,000. Fast forward to March 2015, and the market value is down to about $260.
   
• The IRS considers Bitcoin as property. This means that any transaction using Bitcoin is subject to the same IRS rules as a property transaction. Just to name a few, you need to keep track of any market gains or losses from all your transactions, request applicable W2 or 1099-MISC forms, and declare income from Bitcoin mining. You can find the full guidelines for taxation of Bitcoin in IRS Notice 2014-21.
   
• Bitcoin wallets have been subject to hacking. Hackers stole $436 million from Mt. Gox, $5 million from Bitstamp, and. $1.75 million from Bter. To make matters worse, funds in Bitcoin wallets aren't protected by the FDIC.

So, why would you want to use Bitcoin? Simple — it is a currency that is subject to upswing potential. For example, let's imagine that you bill a client for one Bitcoin at a market value of $260 today. Two weeks later, your client pays you back that one Bitcoin when the market value is at $265. Assuming no other fees, you just made a $5 extra without doing anything!

This explains why several retailers, such as Overstock and Expedia, and manufacturers, such as Microsoft and Dell, are willing to accept Bitcoin. As of March 2015, there are over 3.13 million Bitcoin wallets in the world.

5. Apple Pay

Fanfare and publicity aside, Apple Pay may be the mobile payment service likeliest to go truly mainstream. This mobile wallet (currently available for iPhone 6, iPad Air 2, iPad mini 3, and expected to be available for the Apple Watch later in 2015) stores virtual copies of your debit and credit cards. To pay, you place your finger on the touch ID of your device

Apple does a great job of keeping your transaction information secure. So secure, that some retailers, such as Walmart, CVS, and Rite-Aid, don't process Apple Pay at their stores because they are not able to get that data. Still, there are hundreds of thousands of stores, including Macy's, Sports Authority, and Subway, already accepting Apple Pay or planning to accept it in the near future.

If you're an Apple enthusiast and you like the idea that your credit card information, such as name, card number, or security code, is never revealed to any cashier upon payment, then Apple Pay may be a great mobile payment option for you.

6. Google Wallet

Google Wallet is very similar to Apple Pay because both mobile payment options use near-field communications (NFC) to send the user's payment information to the point-of-sale terminal.

However, Google Wallet has one cool feature that Apple Pay doesn't: With Google Wallet, you can send or request money for free to anyone in the U.S. with a Gmail address.

Recipients of funds via Gmail can request a Wallet Card from wallet.google.com on their computer, or from the Google Wallet mobile app. The Google Wallet card is a prepaid card that you can use to make purchases at online and physical stores that accept MasterCard debit, or to make cash withdrawals at ATMs or banks. Google Wallet charges no fees, except 2.9% with a $0.30 minimum when adding money from a debit card. Keep in mind that some ATMs or banks may charge you for a withdrawal.

These two cool features explain why Google Wallet was able to beat Apple Pay and other similar services in a virtual wallet comparison test from Consumer Reports.

Have you ditched your wallet and fully embraced mobile payment tools? Share your story in the comments.