Understanding Digital Wallets
What is a Digital Wallet?
A digital wallet is an online payment tool that securely stores your debit and credit card information while you make quick and easy purchases without plugging in your card details or pin. Digital wallets are commonly in the form of an app and can be accessed from your smartphone, smartwatch, or computer.
Examples of Digital Wallets
There are a variety of digital wallet apps, some are restricted due to brand purposes (Apple and Samsung for example) while others are universal and can be used on all platforms. Here is a list of digital wallet options:
- Apple Pay (Restricted)
- Google Pay (Universal)
- PayPal (Universal)
- Samsung Pay (Restricted)
- Venmo (Universal)
Benefits of a Digital Wallet
Have you ever forgotten your wallet at home? With a digital wallet, you don’t need to worry about that! Your card information is saved right on your mobile device and is just a tap away from making a payment while you’re out and about. You can also use your digital wallet for rewards/gift cards and digital event tickets to avoid scrambling through the clutter of physical cards and keeping track of ticket print outs.
How Does It Work?
Most retailers have updated their card readers to be compatible with contactless payment options for digital wallets and contactless cards. This will process your transaction without needing to swipe or insert your card. Whether you’re shopping or buying a cup of coffee, you can pay with your digital wallet by holding your device above the contactless symbol (the four curved lines) on the card reader when checking out your purchases.
Digital Wallet vs. Mobile Wallet
Digital wallets and mobile wallets are similar but have different purposes. A digital wallet stores your debit and credit cards virtually on your phone whereas mobile wallets are online prepaid accounts that can allow you to make transactions, deposits and withdraw money.
Safety of Digital Wallets
When you’re making a purchase with a digital wallet, your payment information is protected by having your card number as a virtual number, also known as a token. So, if your phone is lost or stolen, your card number is not displayed. Digital wallets also have additional security that can be used such as two-factor authentication.
Safety tip: Before selling or recycling your device, back up your phone data and then delete your personal information to prevent credit card fraud and identity theft.