
The more I use drive-thrus, the more I see people using their phones to pay for their purchases. They eliminate having to carry an array of cards to fumble through and use. On top of this, add in loyalty cards. Sometimes we sit behind someone while they sort of their method of payment. I am still lost in the days of still using my debit card tap.
Adding a debit or credit cars to your digital wallet allows you to make purchases via your favourite mobile device, without physically presenting your card. A digital wallet adds an extra layer of security over presenting your card physically and allows you to earn your rewards as always. It’s also quick and easy. Just just tap your device or scan a QR code to pay.
Picture this. You’re at the farmer’s market and just spotted the juiciest, most perfect-looking local strawberries. To pay, though, you’ve got to put down the rest of your bags to rummage through your wallet and pull out your card and risk bruising the rest of your produce. Do you buy the berries, or avoid the hassle?
With a digital wallet, you wouldn’t have to choose. Here’s what you need to know about digital wallets and why you should consider adding your debit or credit card to yours.
What is a digital wallet?
Let’s start with the basics. As the name suggests, a digital wallet is an app that stores your payment methods, including debit, credit and gift cards, in one place on your favourite mobile device. Using a digital wallet allows you to make a payment using your phone or smartwatch. For example, by scanning a QR code without the need to present your physical card.
Digital wallets can store a range of other information, too, from concert and plane tickets to loyalty cards, coupons, promotions and more. In short, you’ll have the information you need to make purchases and save money at your fingertips, without having to look through your wallet for the right card.
Are digital wallets safe?
In a word, yes. Not only is your payment information protected by multiple layers of security, but using a digital wallet allows you to make purchases without sharing your credit card number or pin with merchants directly.
Benefits of adding a card to your digital wallet
While you can use a range of payment methods with a digital wallet, there are several benefits to adding your credit card.
1. Gain an added layer of protection for your card
One of the primary benefits of using digital wallets is peace of mind. Not only do digital wallets store your information securely to keep it safe, but they can also offer enhanced security compared to physically presenting your card.
That’s because digital wallets use a security feature called tokenization. In a nutshell, this means that digital wallets present merchants with an encrypted number, rather than your real credit card number. This means merchants won’t have access to your credit card information directly. So if they get hacked and their payment information gets stolen, your credit card number won’t be compromised.
You play an important role in protecting your payment information, too. Lock your phone to avoid unauthorized use and use secured networks, not public WiFi, to access your financial or payment information, including your mobile banking app and digital wallet.
2. Pay quickly and easily anywhere
Picking up groceries on the way home from a busy day only to realize you left your card at home? With a digital wallet, it’s no problem.
While there are still benefits to carrying your wallet, like having easy access to your driver’s license and health card, a digital wallet means you can make everyday purchases whether or not you have your physical card. It also means you won’t have to hold up the line digging through your wallet to find the right card as you can store multiple credit cards in your digital wallet. Just open the digital wallet, select your payment method of choice, and tap your device or scan a QR code to pay.
With a digital wallet, you can tap your device and make purchases up to $250 without the need to present your card. Ideal for groceries, an unexpected thrift store find, or any other last-minute essentials.
The convenience of a digital wallet can be especially helpful during travel. You’ll be able to use your digital wallet at businesses that accept contactless payment, allowing you to make transactions without physically presenting your card. However, it’s always best to have any alternate payment handy, like a physical card or cash, in case a merchant doesn’t accept contactless payment.
3. Earn rewards for using your card
The credit card in your digital wallet earns the same great rewards as any other purchase. So, you can enjoy the convenience of a digital wallet without losing out on points, miles, cash back and any other perks you’re used to. And, because you can make purchases without presenting your card, you won’t lose out on rewards because you forgot your card at home.
In addition, some businesses, including Starbucks, offer their own digital wallets and use them to deliver loyalty programs, exclusive discounts. As a result, adding your credit card to a retailer-specific digital wallet could allow you to earn two layers of rewards: The benefits from the retailer’s digital wallet, plus the rewards for using your credit card.
Digital wallets offer great convenience. But they have limits and risks. Take a closer look at the following cons:
- Limited acceptance at some merchants. Not all stores or services accept digital wallets yet, which can be inconvenient. For instance, on-plane purchases cannot be done with digital wallets.
- Regional availability constraints. Digital wallets are not universally available, limiting their use in some areas. A wallet app popular in one country might not work in another.
- Dependency on technology. Your ability to pay is tied to your device’s battery life and internet access. If your phone dies, you might be unable to make a purchase.
- Dependency on compatible devices. You need a recent smartphone or tablet to use most digital wallets. Older phone models may not support the latest digital wallet app.
- Privacy concerns. Personal information is stored digitally, raising questions about data security. When you pay with a digital wallet, your transaction data could potentially be tracked.
- Varying fees and service agreements. Some digital wallets come with hidden fees or complex terms. For example, you may be charged a small fee for transferring money to your bank account.
The bottomline
As the world shifts to a new technological era, digital wallets are reshaping finance. They mix convenience with innovation. Digital wallets offer a powerful set of tools blending security with global access.
But they have disadvantages. These include reliance on technology and privacy concerns. With a balanced view, users can use digital wallets fully. Digital payments are the way of the future and factor into Keeping Life Current.