There is no wonder why contactless payment methods are growing in popularity. Making purchases without needing your physical credit card is convenient, secure, and easy to use. So what is a digital wallet?
Digital wallets are exactly what they sound like. They’re electronic versions of your physical wallet. They can store things like credit card information, loyalty cards and even tickets you’ve purchased. Digital wallets store your payment options, such as credit and debit cards, allowing you to conveniently use your smartphone or smartwatch to make a purchase. This payment system protects users' banking information and passwords and allows consumers to make safe transactions online, in apps, in stores and even at ATMs.
How do Digital Wallets Work?
Digital wallets work by using contactless near-field communication, which allows your phone to complete transactions through nearby payment terminals. They use what is called a Near-Field Communication (NFC) chip, the same technology that lets you use your contactless pay when you use a physical card. When you want to make a purchase with your mobile wallet, you can either:
- Choose your app and select a card at the checkout screen when you’re shopping online with your smartphone.
- Tap your phone to a digital payment-enabled terminal at participating merchants when checking out.
Are There Different Types of Digital Wallets?
There are many different types of digital wallets. And most can hold several cards at once. Plus, many devices have built-in digital wallets that support some of your favorite digital payment platforms.
- Apple Pay®: An easy, secure and private way to pay with your Apple devices.
- Google Pay™: A safe, simple and helpful way to pay and manage your money.
- Samsung Pay®: Checkout securely in person or online with your Samsung device.
Are Mobile Wallets Secure?
Yes! The information is encrypted to keep it safe. Using a mobile wallet is just as safe as using your physical debit card.
Still, these days, it’s easy to feel like we’re all just one click away from being hacked and having our data stolen. If you do plan to use digital payments on your phone, be sure to take steps to keep your mobile phone secure. Simple things like installing security updates, staying off public Wi-Fi, and using two-factor authentication can make a difference!