(InvestigateTV) — A recent Forbes survey found that half of consumers use digital wallets more than traditional payments.
The survey showed that PayPal, Google Pay, and Apple Pay are the most popular of the phone-based payments methods.
Nathan Grant, a senior finance industry analyst with MoneyTips, said the major benefit of using a mobile wallet is the enhanced security.
“Mobile wallets in particular use what’s called tokenization, which replaces your actual card details, your card number, with a unique token that is for each transaction,” Grant explained. “So, the risk of fraud and identity theft is immediately cut back because if somehow that transaction was taken, it’s just for that one purchase. They can’t do anything with that number.”
Grant said a lot of banks also allow you to add your debit card to the mobile wallet which also provides your debit card number with that extra layer of security when making purchases.
“And I think a lot of people are often worried about the idea of storing their financial information on their phone. They think, ‘Oh, I don’t want to put it on here,’” Grant noted. “But the combination of that tokenization security check, as well as just the typical security checks from your phone that could be face scanning them, scanning passcodes and tends to get into your phone. That’s basically a double layer of security.”
Grant said convenience is also key. Digital wallets can store multiple payment methods, credit cards, debit cards, loyalty cards, and airline tickets on there.
He said the biggest negative is that not all retailers are set up for mobile pay and reminded users to always carry a backup payment method, just in case.
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FAQs
Digital Wallets: Advantages and Disadvantages to Consider
- Convenience. Digital wallets make payments quick and easy. ...
- Security. E-wallets employ state-of-the-art encryption and authentication techniques to ensure the safety of your funds. ...
- Transaction tracking. ...
- Technological dependency. ...
- Privacy concerns. ...
- Regional constraints.
Digital wallet advantages are many: They can be used online as well as in-store; are fast, secure, convenient; and a financially savvy way to purchase goods and services across the board.
Why should I use a mobile wallet? ›
A digital wallet can help you store credit cards, gift cards, customer loyalty cards, membership cards, and more. Digital wallet payments might be a safer option because you reduce the risk of losing a physical credit or debit card.
What are the pros and cons of mobile? ›
In summary, while mobile phones offer entertainment and quick access to information, they can also be distracting for students and pose security risks. It's important to use mobile phones responsibly and balance their advantages with their drawbacks.
What are the pros and cons of mobile pay? ›
Mobile payments can be convenient, fast and secure. They can, however, be expensive and still vulnerable to issues with technology. In particular, if there are any issues with the host phone, mobile payments will be unable to work at all.
What is the problem with e-wallets? ›
Risks of Digital Wallets
Mobile wallet providers may be tempted to collect more data than they need or even sell your information without your knowledge or consent. This could lead to identity theft and financial fraud, as well as other problems that come with having no consumer protection in place.
What is a risk of digital wallet? ›
Theft, Fraud, and Loss: The biggest threat to your digital wallet (and your financial data) might be the physical loss or theft of your phone itself. Primarily, we recommend always keeping your phone out of sight and on your person, especially when you're on the move.
Why not to use a digital wallet? ›
Digital wallet cons
- Merchant availability: Your ability to use a digital wallet depends on whether a retailer offers contactless payment methods as an option.
- User frustrations: Whether you're wearing gloves, glasses or a mask, your phone's stringent biometric ID verification features could slow your payment efforts.
Safer than cash in some circ*mstances
Digital transactions are generally safer and can be tracked more reliably, which reduces potential instances of fraud. Plus, all e-wallets require some form of verification before payment, which means even if someone steals your phone, they can't steal the money in your e-wallet.
What is the difference between a mobile wallet and a digital wallet? ›
Though digital wallets and mobile wallets are very similar, they aren't the same. Digital wallets are typically meant for online transactions, whereas mobile wallets are tied to a smartphone or wearable device. Both connect to bank accounts and credit cards for purchasing on the go.
E-wallets offer convenience, security, and speed. They eliminate the need to carry physical cash or cards, provide secure transactions with encryption, and enable quick payments both online and in-store.
Is it safe to use a phone wallet? ›
In general, digital wallets are considered much safer than using physical credit cards, which can be more easily lost or stolen.
Should I keep my wallet on my phone? ›
Physical cards feature an identifying magnetic stripe, and information can be stolen from them rather easily if criminals tamper with a card reader by adding a skimmer. A digital wallet — is even more secure than a chip card because it doesn't use your actual card number for the transaction.
What are the disadvantages of Apple wallet? ›
Cons of Apple Pay
Apple Pay is not accepted at all retailers and not compatible with all banks or card issuers. Backup may be required, just in case. Apple Pay only works if your phone does. You may still need to carry a physical credit card as a backup in case your battery dies or you misplace your phone.
What are the disadvantages of mobile money banking? ›
3.5. Credibility and authenticity
| S/n | First-order concepts | Aggregated dimensions |
|---|
| 3. | Prone to error and subsequently leading to fraudulent activities | Customer–developer relationship |
| 4. | Keeping personal information safe |
| 5. | No access to physical cash |
| 6. | Unable to spend cash in a transaction |
22 more rowsCons. Lack of Security. Software wallets can be vulnerable to hacking attacks and phishing scams. This is because they need an internet connection in order to operate.
