A Guide to Digital Wallets

Florence Carpenter

Smartphones, laptops, and tablets have become vital parts of life. These gadgets with advanced technologies support people in day-to-day tasks—from communication to photography and recently, financial transactions. With mobile payments being on the rise, many users are now converting to a cashless life with digital wallets.

Are you ready to jump on the trend? Learn more about digital wallets, how they work, and the top digital wallet companies to revolutionize the way you handle your money.

How Secure Are Digital Wallets?

Digital wallets are simply electronic versions of a physical wallet. They are usually accessible through your computer, laptop, tablet, smartwatch, and mobile device. By having a digital wallet, you don’t have to bring a ton of cards with you—plus, you can make quick payments within a few seconds.

But are digital wallets safe? Yes, here are three leading technologies that make it so:

Tokenization

When you pay using your digital wallet, a generated numeric code will replace your credit card information. So, the merchant will not gain access to your valuable details at all, and they will have the code instead.

Sandboxing

Digital wallet applications also set your mobile payment app from all the others. By doing this, other apps on your phone, especially the shady ones, won’t interact with your wallet.

Data Encryption

Using various digital payment applications means that your financial transactions will be encrypted. When this happens, your data is covered with a random code that will render it useless if hackers gain access to the info.

What Are Your Options for Digital Wallets? 

If you are ready to explore the world of digital wallets, all that’s left is to pick one and create an account—but not all digital wallets are created equal. Here is a list of the top five brands and why you should consider each one as your digital wallet provider.

Best Overall: PayPal

  • A payment system and digital wallet combined
  • Accessible through the web and a mobile app
  • Secure encryption and Fingerprint ID access

PayPal hits the top spot for digital wallets as its convenience, speed, and brand recognition makes it a trusted brand for most users. It is easy to install on your phone, and all you need is to link your account to complete payments or receive funds. With PayPal partnering with MasterCard, you can utilize it with a quick tap-to-pay option when you shop in-store.

Best for iOS Users: Apple Pay

  • Free to send money from the in-app balance or linked bank account
  • Accessible with any Apple device 
  • Uses Device Primary Account Number (DPAN) to secure bank info

Apple Pay is Apple’s attempt to give money management solutions to its users. With this digital wallet, you can buy from stores, shop online, pay for transportation, and send money to your friends and family. For security, you can double-click your Apple Watch’s button or use Face ID, Touch ID, and a passcode.

Best for Peer-to-Peer Payments: Venmo

  • Uses data encryption to protect financial info
  • Mobile application available for iOS and Android users
  • Instant Transfer to split the bill or send money to others

If you’re looking for something quick and fun to use, Venmo might be the best pick. Use this app when you’re splitting the bill after a meal or perhaps sending funds to your roommate for your share of the home expenses. Let them know that the transaction went through with a quick message on Facebook or Twitter.


Best for Android Users: Google Pay

  • Pay in-store, in-apps, and on the web
  • Multi-layered security features
  • Accepted in more than a million stores in 28 countries

Google Pay is a comprehensive tool offering a payment system service aside from being a Digital Wallet. It is now available in 28 countries, supported by most banks, and compatible with most Android devices. If a store uses NFC technology, you can make a purchase there.


Best in Payment Features: Samsung Pay

  • Accessible in Samsung gadgets and some Android devices
  • In-app, in-store, and web purchases
  • Fingerprint and iris scans for an extra layer of security

Samsung Pay separates itself from the competition by allowing NFC payments and having MST payments as well. These things mean you can use a magnetic strip method aside from contactless scans. Not only that, but Samsung Pay is also very generous with an abundance of gift cards, membership perks, and rewards.

Why Should You Consider Digital Wallets? 

With more and more people trying out digital wallets, it can be tempting to try it for yourself. But aside from popularity, digital wallets can offer something more. Here are some reasons why you should try them:

  • Convenience - Complete a transaction with a single tap or wave of your smartphone or smartwatch.
  • Organization - Have your credit cards, membership cards, loyalty cards, and more all in one place.
  • Cheaper Costs - Enjoy features for free or for minimal fees.
  • Discounts and Perks - Get access to point rewards systems, promotions, and deals.
  • Efficiency - No need to dig around to find your card, count your cash, and wait for change. Pay within a few seconds.

Frequently Asked Questions

How do digital wallets make money?

Digital wallets collect a small percentage of every transaction done through their banking partners with every purchase the users fulfill on the app.

How are digital wallet payments similar to using a debit card?

Just like paying with a debit card, you have your digital wallet scanned whenever you make payments. Both of these payment solutions ask for a few seconds of your time when you need to complete a purchase. 

How do you use a digital wallet in stores?

Once you’re ready to make a purchase, pull up your digital wallet on your device. Then, hold your gadget up to the symbol on the terminal, and that’s it!

How do you get a digital wallet?

There are various digital wallets available in the market today. You can set it up through your bank or an independent company. Just download the application or sign up to their reputable website. Each provider has its own set of rules and instructions, so be careful and read through them so the process goes smoothly.

Can digital wallets be hacked?

Cybercriminals keep getting creative and finding new ways to gain illegal access to mobile payments. Digital wallet companies are heightening security measures, but users have their responsibilities to avoid data breaches.Digital wallets offer unique solutions that can make your day-to-day transactions quicker and easier. They are indeed worth a try but don’t forget to read the fine print and educate yourself. Learn more information about online payments by exploring Processing Card today.

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