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In this era dominated by smartphones and online transactions, traditional wallets are gradually being replaced by their digital counterparts. Also known as e-wallets, these innovative payment solutions have gained immense popularity and are transforming the way we make payments, manage finances, and conduct everyday transactions. With their convenience, security, and versatility, digital wallets have emerged as a game-changer in personal finance.
What are digital wallets?
Digital wallets are software-based platforms or applications that securely store payment information on a mobile device or computer. They enable people to make in-person and online purchases, send and receive money, pay bills, keep different cards, and much more. Digital wallets utilize near-field communication (NFC) technology and QR codes to facilitate seamless and contactless transactions with another person or business establishment.
Why use a digital wallet?
There are several reasons to use a mobile digital wallet. Some of the most notable key features and benefits include:
- Convenience: You can make payments with your phone without carrying a physical wallet, cash, or checkbook. Plus, you can store as many cards as you wish, making completing transactions anytime and anywhere effortless.
- Enhanced security: Digital wallets employ robust security measures to protect your sensitive financial information. Instead of sharing card details with merchants, a unique virtual account number or token is used for each transaction, ensuring that the actual card information remains secure. Additionally, biometric authentication methods, such as fingerprint or facial recognition, add an extra layer of security to access the digital wallet.
- They provide detailed transaction receipts and notifications.
- They are a contactless method of payment. Etc.
Which digital wallet to choose?
The most popular digital wallets are Apple Pay, Google Pay, Samsung Pay, and PayPal. If you select among the aforementioned digital wallets, your only concern should be their compatibility with your smartphone. For instance, iPhone users should be more inclined to go with Apple Pay rather than Google Pay as it is built-in in the device’s operating system.
When selecting a different type of digital wallet, you should always consider the following:
- Features: Consider the features that are important to you, such as rewards, discounts, and fraud protection.
- Security: Ensure your mobile digital wallet uses robust security measures to protect your data.
- Ease of use: Digital wallets should be accessible and easy to set up and use.
How to use digital wallets?
Apple, Android, and Samsung smartphones have a pre-installed and secure Wallet app to hold your credit cards, banking information, insurance cards, events tickets, boarding passes, loyalty reward cards, etc. The first step to using your digital wallet is to add a card or banking information to your Wallet app. Once you’ve added a payment method on iPhones, double-press the power button to quickly access your cards from the lock screen. On Androids, tap on the small wallet icon in the bottom right corner of your lock screen. Then, simply hold your phone near the card reader and authenticate the payment with your fingerprint, PIN, or facial recognition.
You can use your mobile digital wallet in most places that accept contactless payments, including major retail stores, train stations, restaurants, gas stations, etc.
What are the risks of digital wallets?
Although most people are concerned about the security of mobile digital wallets, the truth is that it is the most secure payment method:
- All transactions are encrypted, and your bank account or card information is hidden from vendors.
- Making any payment requires you to authenticate biometrically or with your PIN or password.
- Many mobile digital wallets offer fraud protection if your account gets compromised.
The biggest risk of using a digital wallet is your phone battery dying: no battery, no wallet, no cash.
The FTC has good information about avoiding scammers preying on digital waller accounts . Learn more here.
What if I lose my phone?
Contrarily of the pickle you might find yourself in when you lose a regular wallet, losing your smartphone does not affect your digital wallet. Not only can you remotely erase a lost phone from any computer, but also, making any payment using your wallet requires a secret pass, and each usage keeps a detailed transaction receipt, including the map address for each transaction.
What to do next?
Want to learn more about digital wallets? Senior Planet offers free Zoom lectures on the subject every month. Stay up to date with our online class offerings at this link.
Also, join the Everything Tech and Ask a Tech Expert groups on the Senior Planet Community platform to ask any tech questions you might have and discuss technologies with other like-minded individuals.
Tell us about the digital wallet you’re interested in or using in the comment. 💳
Techspert Jonathan is Senior Planet’s Sr. Digital Community Relations and Product Specialist and a former Senior Planet San Antonio technology trainer. He is also an iOS developer with a background in Information Systems and Cyber Security.
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Jonathan, Senior Planet’s Techspert columnist, answers one of your questions every month.