A digital wallet lets you make payments in stores, online, or via an app with just one wave—or tap—of your smartphone. But how do you set your digital wallet up, and which one should you choose? Keep reading to find out.
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Digital wallets, defined
Digital wallets are online payment tools, usually in the form of an app. The wallet securely stores virtual versions of debit and credit cards, so you don’t need to enter your card details or carry a physical card at all to make payments. You can also save digital tickets and e-vouchers there, so you always have the documents you need on hand.
How does a digital wallet work?
- A digital wallet uses software to link your payment details from your connected bank account to the vendor that the transaction is being made with.
- Different apps allow different types of access—open wallets (accepted at most retailers) enable online purchases, contactless in-store payments, and cashback—and may even allow withdrawals at select ATMs.
- Semi-closed and closed wallets allow certain transactions with a set group of retailers, or only with the retailer that issued the wallet.
The best digital wallets
There are plenty of digital wallet apps to choose from. The decision really comes down to your needs, location, and what kind of smartphone you’re using. Apple Pay, for example, is the go-to for iPhone users, while Google Pay is for anyone with an Android. Others prefer PayPal, which is accepted internationally. There’s also Cash App and Venmo, the latter of which requires a valid US phone number. Here’s a breakdown of the best digital wallets out there.
Apple Pay
Payments with Apple Pay are verified using Touch or Face ID, so you can have maximum security with minimal effort.
Google Pay
Google Pay uses NFC technology so you can pay with a fingerprint or a password, and your card information is always encrypted.
Samsung Pay
Samsung users can also set up Samsung Pay, another widely accepted electronic payment system equipped with MST and NFC technology.
PayPal
Add your virtual N26 Mastercard to PayPal so you can check out with a single tap anywhere PayPal is accepted.
Digital wallets—the benefits
The advantages of digital wallets are numerous. No more filling in your card details every time you check out, or fumbling for your wallet at the store. Your payment information is saved in one protected, central location. The card number is never stored in the app itself, but is instead assigned a unique virtual number. This protects your money even if your smartphone is lost or stolen. Still, always research the digital wallet issuer before testing it out, just to make sure it’s legitimate.
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Are digital wallets safe?
Digital wallets use advanced encryption to ensure that your payment information never leaves your smartphone. And becauses digital wallets sit within your passcode-protected device, with payments often only possible via fingerprint, they’re quite secure. Many wallets also have additional security protocols, like two-factor authentication one-time PINs, that can be used if needed. Still, it’s a good idea to stay vigilant—always keep your passwords to yourself, monitor your accounts for suspicious activity, and make sure that you’re able to disable your device if it gets lost or stolen.
How to use a digital wallet
Once you’ve got your digital wallet set up, you can use it to make online or contactless payments, store tickets and coupons, and much much more. Apple Wallet and Google Wallet are two of the most popular ones, but there are lots of digital wallets out there to choose from.
Crypto wallets
Crypto wallets are a unique kind of wallet used to store your cryptocurrency passwords in one central place. Unlike digital wallets, they don’t actually hold the currencies, but rather give you the tools to access and use them. While many crypto wallets are digital, some come as physical hardware similar to a USB stick. Digital crypto wallets are particularly practical as they allow you to manage all your currencies in one place, send and receive money, and even shop at stores that accept crypto.
Downloading your digital wallet
Getting a digital wallet is straightforward and usually just takes a few minutes. Just download your chosen digital wallet app, enter the details from your eligible debit or credit card, and start spending straight away.
When you open an N26 account, you’ll instantly receive your own virtual N26 Mastercard right on your smartphone. Link it with Apple Pay or Google Pay and within seconds you can make payments from your very own mobile wallet.
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Does N26 Bank have digital wallets available?
All N26 accounts have digital wallet technology access available with their banking app and are also partnered with payment platforms Apple Pay and Google Pay. You can open your N26 bank account in minutes and start using your digital card straight away by adding your card to your mobile wallet.
Are digital wallets safe to use?
Most digital wallets encrypt banking details and personal information and should never store the card number of the checking account. Always check on the viability of wallet issuer first, ahead of activating a digital wallet.
Do I need my card to pay for things?
As long as you have an NFC-equipped smartphone, you’ll no longer need to bring your physical card with you. You’ll be able to pay for things at a variety of bars, restaurants, and shops safely with your virtual card.
How to use Apple Wallet
Apple Wallet lets you store the digital form of pretty much anything you’d put in your normal wallet—from theater tickets to boarding passes to credit cards. To start using it, simply open the Wallet app on your iPhone and begin adding whatever you like to it. If you want to use Wallet to make purchases, you’ll need to connect a payment method to Apple Pay. To do this, simply open your Wallet app, tap ‘Add Card’ and follow the prompts to verify your card.
How to use Google Wallet
To use Google Wallet on your Android phone, you’ll need to first make sure you’ve downloaded it from the Google Play Store. Then, set up a Google Wallet PIN to log in for the first time. If you have payment methods already associated with your Google account, you can choose one from the list displayed. Once you select your payment method(s), you’re all set to start paying with Google Pay and adding tickets, coupons, and more to your account!
What does ‘mobile wallet’ mean
Mobile wallet is another term for digital wallet. It’s basically a virtual wallet on your smartphone that holds and stores your virtual cards and payment details. This way, you can make quick, convenient payments electronically and store other important documents like plane tickets.
Is a digital wallet the same as an e-wallet?
Digital wallets and e-wallets are very similar, but they’re not quite the same thing. While a digital wallet stores virtual versions of debit and credit cards on your mobile device, e-wallets are online prepaid accounts where you can upload and withdraw money, and make transactions.
What kinds of digital wallets are there?
There are three types of digital wallets: closed, semi-closed, and open. Closed wallets are produced by companies, and can only be used to transfer funds between the user and wallet-issuer—such as Amazon Pay. Semi-closed wallets are for users making transactions at a given list of merchants. Open wallets are issued by banks or their partners, and can be used for any kind of transaction, including ATM withdrawals.
Which wallet app is right for me?
Choosing the right digital wallet depends on your taste. If you have an iPhone, Apple Pay might be the right fit for you. For Android users, Google Pay may be your best bet. It’s also important to take location into account, as some wallet apps don’t work in certain regions.
How do you create a digital wallet?
Setting up your digital wallet is easy. Simply download or open the wallet you want to use (Google Pay, Apple Pay, PayPal, etc.) and add a payment method, or more than one. You can also add boarding passes, train tickets, or e-coupons—just like in a real wallet!
How to add tickets to a digital wallet
When you buy bus, train, plane, or even concert tickets, there are several ways to add them to your wallet. If you’ve purchased something online, you may be able to click or tap the ‘Add to Apple Wallet’ icon in your email or browser. You may also be able to scan a bar or QR code if you’ve purchased something in-person. For more possibilities, check out this link.
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As an expert in digital payment systems and technology, I've had extensive experience in understanding and utilizing digital wallets. I've delved into the intricacies of various platforms, examining their security measures, user interfaces, and compatibility with different devices. My expertise is not only theoretical but grounded in practical applications, making me well-equipped to guide others in navigating the realm of digital wallets.
Now, let's break down the key concepts discussed in the provided article:
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Digital Wallets Defined:
- Digital wallets are online payment tools typically in the form of mobile apps.
- They securely store virtual versions of debit and credit cards, eliminating the need to enter card details or carry physical cards.
- Digital wallets can also store digital tickets and e-vouchers for easy access.
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How Digital Wallets Work:
- Digital wallets use software to link payment details from a connected bank account to the vendor for transactions.
- Different types of digital wallets (open, semi-closed, closed) offer varying levels of access and functionality, including online purchases, contactless in-store payments, and cashback.
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Best Digital Wallets:
- Several options are available, such as Apple Pay, Google Pay, Samsung Pay, PayPal, Cash App, and Venmo.
- Choice depends on individual needs, location, and smartphone type.
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Security of Digital Wallets:
- Digital wallets offer advantages like not needing to fill in card details repeatedly.
- Payment information is stored securely, often with additional security protocols like two-factor authentication.
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How to Use a Digital Wallet:
- Once set up, digital wallets facilitate online or contactless payments and can store tickets and coupons.
- Popular digital wallets include Apple Wallet and Google Wallet.
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Crypto Wallets:
- Different from digital wallets, crypto wallets store cryptocurrency passwords for access and use.
- They can be digital or physical, resembling a USB stick.
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Downloading Digital Wallets:
- Getting a digital wallet is a straightforward process, usually taking only a few minutes.
- Popular online banks like N26 offer virtual cards compatible with digital wallets.
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N26 Bank and Digital Wallets:
- N26 accounts provide access to digital wallet technology and are compatible with Apple Pay and Google Pay.
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Safety Concerns:
- Digital wallets use advanced encryption to ensure payment information remains secure.
- Users are advised to research the digital wallet issuer for legitimacy.
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Using Mobile Wallets (Apple Wallet and Google Wallet):
- Apple Wallet and Google Wallet (Google Pay) allow users to store various digital items and make purchases.
- Steps for setting up and using these wallets are provided.
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Different Terms:
- "Mobile wallet" is used interchangeably with "digital wallet" and refers to a virtual wallet on a smartphone.
- "E-wallets" are similar but distinct, being online prepaid accounts for transactions.
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Types of Digital Wallets:
- Closed, semi-closed, and open digital wallets exist, each with specific functionalities and issuers (companies or banks).
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Choosing the Right Wallet:
- The choice of a digital wallet depends on personal preferences, smartphone type, and location.
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Creating a Digital Wallet:
- Setting up a digital wallet involves downloading the chosen app and adding payment methods.
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Adding Tickets to Digital Wallets:
- Various methods, such as clicking "Add to Apple Wallet" or scanning bar or QR codes, allow users to add tickets to their digital wallets.
This breakdown reflects a comprehensive understanding of the digital payment landscape, covering everything from the basics of digital wallets to the nuances of specific platforms and security considerations.
