The concept of currency has come a long way and digital forms of currency are rapidly substituting traditional banknotes. But what exactly is a digital wallet and is it something you should think about getting?
- Digital wallets are just a digital version of your wallet
Just like your everyday wallet, you can fill your digital wallet with credit or debit cards by manually entering your card information or uploading a photo of your card. When it’s time to make a purchase you simply tap it at the payment terminal and use a fingerprint or PIN code to authorise the transaction. Not all retailers accept this technology yet but this is rapidly expanding across Australia. They can also be used to store payment information (eg. credit card or bitcoin) for exchanges to anyone else in the world securely, quickly and affordably.
- They don’t have to be on a smartphone
Despite smartphones being one of the biggest platforms for digital wallets, the technology is expanding amongst other large tech corporations. Fitbit has now adopted the digital payment platform so that you can access a digital wallet on your wearable device. Similarly, Paypal have introduced e-wallets in the form of wristbands for party goers at festivals to pay for food, drinks and merchandise using their wristband.
- They save money and time
Perhaps the biggest advantages to recognise about digital wallets is that they save money and time. Excessive costs of international money transfers as well as many other banking transactions are reduced, whilst offering a much faster, more streamlined and efficient user experience. It also takes away the hassle of having multiple cards for numerous accounts – this way you can operate them all at the same time.
- They do more than just transfer money
Digital wallets actually have various functions, much more than just the transfer of financial funds from one party to another. Other features include:
- Store and use coupons, loyalty cards and gift cards
- Store and use tickets, transport cards and boarding passes
- Access keys like hotel rooms, front door and car (if yours use digital access)
- Identity documents like passports and driving license
- They are secure
Digital wallets utilise the same technology used in mobile banking which has proven to be very secure. They encrypt the data (like your credit card number) using tokenization, making it difficult for any third part to intercept the data. They also rely on extra security features like two-factor authentication to approve transactions.
- They minimise risk of theft
Having a digital wallet means there is neither physical money, cards or personal identification documents to be stolen. However, if the phone or device itself is lost or stolen, some digital wallets have the capability to delete all data to protect your personal information from being spread.