There is almost nothing cooler than being able to leave your home without your wallet. Today, cell phones let commuters get on the subway with a tap, buy coffee with a tap, and attend shows and movies by displaying a screen.
All of this is due to digital wallets, an innovative way for customers to hold their financial and important documents on their cell phones for access at any time.
Near Field Communication
Thanks to near field communication (NFC), customers are able to store their credit card, banking information, gift cards, etc. on their phone’s digital wallet. Merchants with “tap and pay” payment processing machines simply ask customers to tap their phone on the terminal to complete the transaction.
Digital wallets are usually strongly encrypted, meaning that the data from customers’ credit cards is scrambled before it’s transmitted and then unscrambled by the payment machine. Encryption makes it nearly impossible for someone to steal your financial information. Because of this, digital wallets are more secure than credit cards themselves, since credit cards can be easily cloned.
For customers, having a digital wallet means no longer having to carry around a bulky physical wallet filled with gift cards from your grandmother. Instead, when a customer receives a gift card, he can upload it to the wallet and use it whenever he’s at the applicable store. Certain digital wallets will even scan the phone’s location and notify users when they’re near a store to which they have a gift card.
Similarly, event tickets, movie tickets and even plane tickets can be stored electronically on a digital wallet. Although airline security measures mean you’ll still have to carry your ID with you, not having to keep track of your cell phone and ticket is a welcome change for people whose minds run in a million directions.
Digital wallets are so popular that they aren’t only offered by banks and credit unions. There are dozens of companies like Paysafe that offer digital wallet solutions to customers and merchants. Increasing competition in the market means prices always seem to be dropping.
Digital Wallets May Be Here to Stay
Still think digital wallets are a fad that will soon pass? Here are some digital wallet facts – MasterCard recently conducted a survey and found that almost half of the respondents paid for purchases using a cell phone, with three-quarters of shoppers in India using a cell phone to pay. Of these cell phone shoppers, 45% used a digital wallet in China, 37% in India and 23% in Singapore. In short, the technology is becoming increasingly popular and the number of users is growing seemingly exponentially.
One of the key benefits of a digital wallet is that data is safe from prying eyes and can be quickly transmitted. Because of this, many merchants that accept digital wallets also allow users to input their shipping and billing data in the same way as financial data. This cuts down on errors, as well as user frustration while trying to complete order forms.
Worried about someone snatching your phone and your whole financial life? Digital wallets are protected, at the least, with a password. More sophisticated or advanced digital wallets will use biometrics – like your fingerprints or and iris scan – to access the information or make a purchase.
FYI: I worked at a dead end cubicle job from 2005-2011 for about $30,000 per year. I went self-employed in July 2011 and make between $70,000-$90,000 through blogging, professional pet sitting, hubby's reffing, and our rental home. If you’d like to start your own site (link to my free step-by-step guide), I highly suggest checking out Bluehost (my referral link with a nice discount for you, PLUS a free custom header banner from me!). Please contact me any time at budgetingfunstuff*at*gmail*dot*com with questions or just to brainstorm! I’d love to help!