A digital wallet is simply a digital version of your physical wallet. All of your cards can be stored in a digital wallet app on your smartphone. There is some confusion between mobile wallets and digital wallets. They are often interchangeable. Yet some people refer to mobile wallets as the ones created by phone providers, while digital wallets are provided by financial institutions.
There are several different wallets on the market that can serve as your digital wallet. Some are exclusive to the type of phone you have, and others can be used despite the phone you have:
- Apple Pay
- Android Pay
- Samsung Pay
- Microsoft Wallet
- Google Wallet
- Amazon Pay
- Square Cash
Credit card companies and banking institutions have their own versions of digital wallets:
- Chase Pay
- PNC Wallet
- VISA Checkout
- AMEX Express Checkout
How Does It Work?
- Download the mobile app of your choice, if necessary.
- Load the cards you want to onto the app: credit cards, debit cards, membership cards, etc.
- Choose the card you wish to use to complete your purchase from the app.
- Tap your cellular phone against the NFC chip device, usually located on the credit card machine.
What you choose to use, is solely up to you. Your bank, and your credit card companies may offer you benefits to having their digital wallets. That is perfectly fine, get all of the benefits you can. Digital wallets have serval features like allowing its users to shop online from their mobile devices, pay bills, store personal information, make payments from peer to peer, storing information, and much more.
We all know that credit card fraud has been at an all-time high in the last few years. Credit card companies on average spend over $8 billion a year combating credit card fraud. There are about 135 billion credit/debit card transactions every year. If as a result of digital wallet use, credit card fraud decreases, credit card companies would have no choice but to support it. This would help to increase the use of the technology around the world.
Benefits of Having a Digital Wallet:
- Convenience. Imagine leaving your wallet at home, and then realizing it’s not even a big deal, because everything is on your phone. Also, checking out at a store, or even online, is now super-fast with using a digital wallet. Just tap or wave your phone in front of the sensor on the payment station, and you’re on your way.
- Organization. You can quickly and easily, organize all of your cards in your digital wallets. All of your credit cards in one place, debit cards in another, membership cards in another, and customer loyalty cards in another. Everything can be nice and neat at the click of a button.
- Less “junk”. Unlike your physical wallet with all kinds of card and receipts falling out of everywhere, your digital wallet will not have any of that. No more heavy back pockets or purses!
- Discounts and bonuses. Companies offer incentives when you sign up for their memberships and loyalty cards. You will never miss a notification for a discount or a bonus, it’ll be right at your fingertips for you to use.
- More secure. Getting your wallet stolen, is such an invasion of privacy. You have to call all of your financial institutions and put holds on and cancel accounts—it is such a hassle. If you lose your phone, or it gets stolen, the person who has it would have to get past your lock screen, and the codes you may have on your digital wallet. Also, when you make transactions, your card number is not associated with it. The digital wallet creates an exclusive identifier for you, used in place of your card number. This is a method that prevents companies from having your personal information.
Digital wallets don’t only allow you to keep your credit/debit cards, and membership cards together and organized. Digital wallets can also help you to keep up with business cards, receipts, insurance card, IDs, train tickets, and even concert tickets.
All of the benefits of digital wallets are great. However, they do present an issue for some consumers, and the companies who’ve created them. The issue is that not all businesses are technologically equipped to take payments via digital wallets. There needs to be a major technological updates at stores and various retailers, so that the technology isn’t going to waste.