Personal Resource Center
Used in conjunction with mobile payment systems, all you have to do is wave your phone in front of a reader and pay for a purchase in a snap.1 Some of the most well-known and widely used digital wallet services include Apple Pay® and Google Wallet.2
Benefits of using a digital wallet
CNBC reported that one in 10 millennials use their digital wallets to pay for every purchase.3 But why would you choose to go digital when your trusty leather wallet has served you perfectly well? There are some major benefits to opting for the digital version.
- Convenience: One of the biggest benefits of using a digital wallet is convenience. Not only can you store all your debit card and credit card information, you can even keep store loyalty cards and online coupons in your digital wallet, eliminating the need to carry all these items around with you.
- Safety: If you lose your physical wallet, you have to go through the process of canceling credit cards and checking your statements for fraud. Plus, if you had any cash on you, it's gone for good. On the other hand, a digital wallet protects all your financial information behind a password. Of course, you need to follow proper security protocol for your smartphone (more on that below).
How to use a digital wallet
To get set up with a digital wallet, you'll first need to select and download an app, such as Apple Pay or Google Pay™. The app will assign special digital card numbers for each of the debit and credit cards you link up, which are specific to your app and device only. You'll also need to set up a single password for your digital wallet that grants you access to all your payment options. There's no need to memorize any information other than this password — if you're worried about forgetting it, write it down and keep it somewhere secure such as a home safe or password manager (never in your wallet or on your phone!).
Keeping your digital wallet safe
In many cases, using a digital wallet can be safer than carrying a physical one — but only if you follow certain precautions. Here are a few simple things you can do to keep your digital wallet safe.
- Use two-factor authentication.5 It's always a good idea to password-protect your phone to secure it in case it's ever lost or stolen, especially if you're using a digital wallet. Be sure to set a password to unlock your phone, and if possible, enable fingerprint authentication or a similar two-factor authorization system.
- Never use public Wi-Fi. Even if your phone security is tighter than Fort Knox, your sensitive financial information is still vulnerable to hackers if you use open or unsecured public Wi-Fi networks.
- Set up account alerts. To be on the safe side, it's a good idea to monitor your account activity and keep an eye out for any suspicious transactions. An easy way to stay ahead of potential fraud is setting up text alerts from your bank. For instance, you can receive a text any time a purchase for more than $50 is made.