The term “digital wallet” is more popular than ever before thanks to the introduction of blockchain technology. These handy protocols largely eliminate the need to carry your traditional wallet. Instead, digital wallets store all of your valuable information via an App. Digital wallets also go by the name “e-wallets.”
Today’s Digital wallets can serve a multitude of purposes. These mobile applications allow you to upload items such as your driver’s license, gift cards, credit cards, tickets for entertainment events, and transportation passes. In this manner, digital wallets simplify your daily activities. You gain added security knowing you don’t have to carry your original documents. Additionally, you can recover lost data via backups. Try doing that with a lost wallet.
How Does a Digital Wallet Work?
Thankfully, digital wallets aren’t complex in nature. In most instances, you just need to download a digital wallet mobile app to get started. These mobile wallets are ideal for a couple of reasons. For one, they can function on nearly any smart device. These devices include smartphones, tablets, and smartwatches.
For those concerned about keeping all this data on their mobile device, there are also CPU-based versions of digital wallets available. These platforms are not as popular as their mobile counterparts. However, they are a bit more secure, especially from loss or theft. Cryptocurrencies such as Bitcoin, offer CPU digital wallet options to users as a more secure alternative to mobile apps.
Where Can I Get a Digital Wallet?
Nowadays, digital wallets are more available than ever before. You can find these applications in a multitude of places. One of the first places to locate a reliable digital wallet is from your bank. All major banks offer some form of a digital wallet to supplement their banking services.
Additionally, there’s also no shortage of mobile wallet options available from third-parties. Simply go to Google Play or the Apple Store and you are met with a variety of popular options to choose from. Importantly, always do research on e-wallet app providers prior to downloading their product. Remember, this app will host tons of private and important data for you. You need to be sure you only go with the trusted alternatives.
In the case of cryptocurrencies, there are additional options to consider. Usually, the wallet provided by the crypto’s developers is the best option. It will be the most secure. However, it may not provide you with all the flexibility you may require. Luckily, third-party developers have also introduced a number of reputable multi-crypto options for you to consider.
Using a Digital Wallet for Everyday Purchases
To use your digital wallet to make everyday purchases is simple. The first step is to find a merchant that accepts digital wallet payments. This step is easy enough. Simply look for a digital wallet symbol on the merchant’s POS. Importantly, there are usually two types of digital wallet POS systems in use today – contactless and magnetic.
Contactless terminals will allow you to conduct transactions via NFC, Bluetooth, WI-FI, or some other form of wireless transmission. Near Field Communications, or NFC technology is one of the fastest-growing types of mobile wallet tech currently in the market. This technology allows you to effortlessly send funds simply by being in the vicinity of the POS. Comparingly, most other forms of mobile wallet transactions require you to hold the phone up to the POS directly to complete the transactions.
After locating a participating retailer, you’re ready to put your mobile wallet to use. Simply hold your Smartphone to the POS and await an approval prompt. Once the prompt ques, approve the transaction and your transaction is complete. It’s as easy as that.
Digital Wallet at ATMs
Digital Wallets also make ATM visits more pleasant and efficient. Similarly to a POS, you don’t need to physically handle any items other than your phone to conduct your transaction. Simply, hold your smartphone near the ATM and wait for the prompt to appear. From here you can manage your account and receive cash from the ATM, all from the security of your smartphone. Importantly, this feature continues to gain popularity during the Coronavirus pandemic. Now, more than ever, touchless consumer options are ideal.
Advantages of a Digital Wallet
Digital wallets bring some major advantages to the market. For one, e-wallets provide users with more security. Have you ever lost your wallet? Can you remember that feeling you got realizing that all of your personal and sensitive information was now floating around free in the world? You can eliminate that scare with a digital wallet.
Digital wallets incorporate various security protocols to ensure that only the rightful owner gains access to the information within. Depending on your wallet provider, this security could entail passwords, fingerprint or face scan technology, 2-factor authorization techniques, and encryption.
You gain a lot of organization with a digital wallet. All of your information can be accessed in a convenient manner. No more digging through your wallet or purse to locate that one membership card you barely ever use, but now you need so badly. No more lost or forgotten ATM or credit cards.
Perhaps one of the most important reasons to consider a digital wallet is the fact that these apps are just so much easier to use than traditional wallets. Aside from not having to carry a bulky wallet with you, you also gain the ability to effortlessly make payments via your phone. Once you have your wallet set up with all of your payment info and membership cards, you can realize some real savings. Now, you always have your discount information on hand.
Digital Wallet Types
Today, there are all types of digital wallet providers at your service. However, due to the sensitive nature of the information in your wallet, including the ability to access your bank account, It’s important to stick with only reputable brands. Here are the top digital wallet choices:
Non-Crypto Digital Wallet Options
When you hear the word “digital wallet” you may assume that this term is exclusive to the blockchain space. In reality, digital wallets evolved separate from blockchain technology, although during the same time frame. Major financial providers have always been interested in ways to simplify user transactions. Consequently, digital wallets were always a topic of interest for financial service developers.
Today, consumers have access to more digital wallets than ever. New providers continue to enter the space, all with their unique features and settings. As the space gets more crowded, it’s important to recognize the pioneers in the sector:
PayPal One Touch
The PayPal OneTouch platform comes from one of the oldest major digital payment companies in the world – PayPal. As such, this platform leverages the network of this established provider to give you the ability to use your e-wallet nearly anywhere. Additionally, the platform streamlines PayPal’s most popular services. You can send, receive, and request funds directly from the wallet’s interface.
Venmo is one of the most popular digital wallet apps in the world. As of 2019, the payment app registered over 40 million active users. One of the best parts about Venmo is the fact that many businesses have embraced the app. This support from the public and business sectors pushes mobile wallet adoption to new heights.
Venmo became so popular thanks to a variety of reasons. Importantly, Venmo provides free bank transfers for users. The average bank transfer time can take 3 days with the app, but you can expedite the funds for an extra 1%. Notably, PayPal purchased Venmo in 2016 as part of the $800 million Braintree acquisition.
Samsung was one of the first firms to recognize the need for more digital wallet options in the space. As such, Samsung Pay entered the market way back in 2011. Today, the platform is stronger than ever. You can pay in person, on the app, or online using the interface. The only downside to the platform is you must own a Samsung Smartphone to utilize it.
Apply Pay came about as a response to Samsung Pay. This e-wallet includes all the features you would expect from one of the most recognized names in the tech industry. Per company policy, Apply Pay is exclusively for iPhone or Apple Watch users. The platform allows iPhone users to make in-store and online transactions directly from their devices.
Apple Pay has led the way in terms of security in the sector. The platform incorporates a built-in ID verification system. The system requires you to provide a Face-ID or Pin code to confirm transactions.
The eWallet app is an extremely versatile app that is available on Apple, Android, Mac, or Windows desktops. This unique platform doesn’t fit the normal functionality of a digital wallet because you can’t send or receive payments. However, the platform can store all of your sensitive financial information in a secure online location that you can access from any device globally.
Along with the ability to hold your credit and debit card information, eWallets can store your Passports, Insurance cards, Loyalty program cards, Library cards, and even your Airline frequent flyer cards. All of this functionality will cost you around $9.99.
Crypto Digital Wallet Options
Digital wallets are a core component of the blockchain infrastructure. They are the main interface for cryptocurrency interactions. Consequently, these digital safes are meant to keep your private keys stored securely. Additionally, they interact with different components within the blockchain ecosystem to facilitate transactions
Most large scale cryptocurrency projects such as Bitcoin, Ethereum, and Monero provide a native wallet. In most instances, the developer wallet option is the most secure. You can send, receive, monitor markets, and even stake your coins to earn more depending on the type of cryptocurrency you hold.
Third-party digital wallets designed to support cryptocurrencies are the most popular option. These wallets provide users more interoperability in the market. For example, wallets such as Jaxx, allow you to store multiple cryptocurrencies in the same wallet. You can also access valuable market data including volume, news, and block explorers.
Digital Wallet Concerns
One of the main issues surrounding digital wallet adoption stems from technological restrictions, not from the protocols, but of the devices they run on. Basically, even the best digital wallet in the world is useless if your phone battery dies. You may have dealt with a declined or lost credit card in the past, but imagine one that needs to charge before you can use it. In extreme situations, users could be left without access to their funds.
The Traditional System Still Works
Another major roadblock facing digital wallet adoption is the fact that most people still prefer to use plastic and cash. Studies have shown that consumers feel no real need to upgrade their payment systems at the moment. In fact, 3 out of 4 consumers don’t see the point in the upgrade currently.
According to research fielded by YouGov, 43% of consumers don’t think mobile wallets are secure. Additionally, around 38% are concerned about losing their device. Your mobile wallet won’t be much help to you if you can’t locate your phone.
Digital Wallets – The Future of Finance
Despite these concerns, the digital economy requires digital wallets to function. You can expect to see these protocols continue to be a critical component of the financial sector moving forward. For now, the blockchain revolution appears to be pushing digital wallets into the spotlight yet again.