If you’re not interested in carrying around cash or your physical credit card, digital wallets may be your thing. They are also called electronic wallet or e-wallet.
Digital wallets are a payment system that protects your banking info and passwords – so it’s secure. This is for the people who want to make safe transactions without the use of cash.
While a thief could grab your wallet and get access to your credit cards in seconds, digital wallets feature encrypted credit card and banking information to safeguard them from hackers. What’s more, if somebody steals your phone, a passcode or biometric authentication would still be needed to get access to the information in a digital wallet.
Don’t get mobile wallets confused with digital wallets, though. A mobile wallet is an app that is stored on your smartphone, while a digital wallet can be found on a desktop, laptop and a mobile device.
The benefit of digital wallets is convenience. Instead of scrounging for cash to split the bill or pay someone back, all you have to do is log onto your digital wallet and pay someone electronically.
Digital wallet apps:
- Square Cash
- Google Wallet
- Facebook Messenger
- Apple Passbook
How does it work?
A digital wallet can be set up through your bank or an app on your smartphone. Typically digital wallets are free, but you’ll want to review the terms and conditions. For example, on Venmo, if you pay someone through your credit card, there is a 3% fee. However, if you pay directly from your bank account, there is no fee.
When you pay someone through a digital wallet, the money you send someone can be deposited directly into their bank account. There are also digital wallets that enable you to store cash, such as a cryptocurrency digital wallet like Coinbase, which allows you to convert your cash into cryptocurrency.
“Another major perk of digital wallets is additional savings. Some digital wallets not only afford ease of use, but also offer rewards for using them” according to USnews.com
With digital wallets, the biggest selling point is the ease. Since everyone almost always has their phone on them, it’s not hard to pay someone, or pay for someone from the convenience of a smartphone. A transaction can be done within seconds, and boom. No pesky cards or cash to handle.
If you’re looking for the perfect digital wallet, go online and do some research on the best ones for you. The most popular and trusted seem to be PayPal, Venmo and Google Wallet – but there are many good options out there.