6 Reasons Why You Should Switch to a Digital Wallet

 

What is a digital wallet?

Digital wallets (sometimes referred to as e-wallets) offer customers a convenient way of storing information (such as online payment account information, credit card information, 

Web site passwords, and shipping and billing information) that is needed regularly for e-commerce purchases. Digital wallets are available as both stand-alone programs and online services. In either case, the information in the digital wallet is encrypted and protected by a password and the necessary checkout information is transferred (either manually or automatically) to the online order form, as it is needed. Digital wallet programs are available for conventional personal computers and as mobile apps for mobile phones; including an iPhone digital wallet app. Some digital wallets include a feature that automatically supplies information (such as a username and password) whenever that information is needed for sites that the user specifies in the digital wallet program. Other digital wallets include a menu option to copy the appropriate information (such as a credit card number or shipping address) to the appropriate location on a Web form as needed. If a mobile digital wallet supports NFC (as is the case with Visa's upcoming digital wallet), offline purchases can be charged to a payment account located in the digital wallet by waving the phone near a payment terminal. 

An online digital wallet stores the same types of information as a digital wallet program, but the information is accessed online during the checkout procedure instead of by launching the digital wallet program. An example of an online digital wallet that can be used with a variety of e-commerce sites is Google Checkout. To use Google Checkout, individuals need to sign up at the Google Checkout site, supplying their shipping, billing, and e-mail address, as well as their credit card information. To make a purchase at a Web site offering Google Checkout, the shopper just selects that option on the checkout page, signs in to Google Checkout, and the transaction is completed using his or her registered information. There are also site-specific digital wallets that store checkout information in the customer's account for use with purchases on that site only. These digital wallets facilitate purchases on return visits. E-commerce sites wanting to offer their customers digital wallet services need to decide which types of digital wallets they will support (such as stand-alone digital wallet programs and/or online digital wallets like Google Checkout), as well as whether they want to offer a custom digital wallet service just for their site. 

 

1. It's more secure than carrying cash or credit cards

Digital wallets are, for the most part, secure.

Digital wallets, according to the Identity Theft Resource Center, rely on tried-and-true security features like two-factor authentication and one-time-use PINs.

Users' financial and password information is also scrambled using encryption technology in wallets. Hackers will have a harder time intercepting this information when customers utilize their digital wallets to make purchases.

You don't have to be concerned that using digital wallets and the apps that support them is fundamentally riskier than using credit or debit cards at a cash register or other point-of-sale device.

However, you should be aware that thieves can still access your digital wallets if you lose your smartphone or any other device that connects to them.

2. It's less expensive than carrying cash or credit cards

Because digital wallets are so widely used, you're unlikely to have any complications with incentives if you utilize one. If your phone is in, your issuer will usually be able to fix it.

You may have your own reasons for not using a digital wallet, but one thing you won't have to worry about is earning credit card rewards.

Some issues existed years ago when these cardless, contactless payment methods were still a new technology and not widely used. But nowadays, it doesn't matter if you swipe, dip, use PayPal, or simply hold your phone over the payment terminal. In most circumstances, you will receive the cashback, miles, or points promised by your credit card. If you don't, you can contact your card issuer, who will usually resolve the issue.

In fact, the Apple Card and the U.S. Bank AltitudeTM Reserve Visa Infinite® Card are two examples of credit cards that directly reward you for utilizing a digital wallet.

Of course, there are exceptions and fine print. It's also crucial to know how digital wallets function so you can make sure no incentives get lost as your iPhone hovers over a scanner.

3. It's more convenient than carrying cash or credit cards

The adoption of digital wallets has the advantage of allowing many people in poorer countries to participate more in the global financial system. It allows participants to receive compensation for services done as well as monies or fees from friends and relatives in other countries.

Another advantage of e-wallets is that they do not require a physical bank account or branch, making them more accessible to those in remote areas.

Furthermore, it promotes the usage of cryptocurrencies such as Bitcoin, which simplifies the global transaction process.

4. There are no “overdraft fees” with your bank account when you use your debit card as opposed to using checks or ATMs

Banks charge a range of fees for their services, but overdraft and bank account fees are common complaints.

5. You can get rewards points for using it instead of using your credit card

Many companies offer rewards programs to incentivize loyalty. Some rewards programs are tied to credit cards, such as American Express Membership Rewards and Chase Ultimate Rewards, while others are tied to a certain company like JetBlue TrueBlue and Southwest Airlines Rapid Rewards.

6. It's safer than

Despite the fact that credit cards are the most vulnerable when payment systems are hacked, mobile payments, in general, are being mistakenly labelled as part of the problem, making them seem more frightening with each new breach.

Credit cards are insecure, thus digital wallets are a safer option. However, despite the fact that the digital payment market is expected to increase at a 14.1 per cent annual rate between 2018 and 2023, widespread adoption of digital wallets is contingent on customers believing that these wallets are more secure.