What is a Digital Wallet?
A digital wallet is fintech in the form of an app that runs on mobile devices to store information for credit cards, debit cards, or bank accounts. For all intents and purposes, it eliminates — or at least reduces — the need to carry physical cards with you. Digital wallets can also store information about gift cards, event tickets, plane tickets, and hotel reservations. In some states, you can even use a digital wallet to hold an electronic version of your driver’s license. Aside from pictures of your dog or that bit of wisdom you saved from a fortune cookie, digital wallets can store almost anything that a traditional, physical wallet could hold. Some of the most popular digital wallets available include ApplePay, Google Wallet, Samsung Pay, Venmo, and Cash App. While they all serve the same purpose, some wallets are better suited for specific mobile devices, and some offer different perks. For example, Venmo is ideal for those who make smaller purchases or send money to friends and family, while ApplePay gives users a convenient, cashless way to make purchases online or in person.How do Digital Wallets Work?
Digital wallets use software to connect your digital payment method with the vendor that you are purchasing from. The methods of connection used are typically through a QR code, near field communication (NFC) – technology that lets two smart devices exchange information with electromagnetic signals or magnetic secure transmission (MST), the same method that magnetic card readers use to read data from your debit or credit card.Benefits of a Digital Wallet
Arguably the most widely-used fintech, digital wallets offer multiple benefits to everyday consumers. Whether you’re thinking about trying your digital wallet for the first time or you use yours every day, the perks of using this time-saving technology are the same.Convenience
Digital wallets are incredibly convenient. For those who don’t like carrying a physical wallet, digital wallets are your answer. As long as you have a mobile device that supports a digital wallet app, you can keep your most important day-to-day items with you all on your phone.
No More Lost Cards
Raise your hand if you’ve ever misplaced a debit card, credit card, or driver’s license. (Our hands are up too.) We’ve all been there; this is where a digital wallet can come in handy. As long as you have your mobile device, you also have some of the essentials in your wallet with you. For those of us who can be forgetful from time to time, a digital wallet can be the dependable backup we need.
You Don’t Need a Bank
That’s right; you don’t even need a traditional bank account to enjoy all of the conveniences of a digital wallet. Many employers pay their employees using a digital paycard. These digital cards can be loaded with funds, easily stored in a digital wallet, and used for everyday purchases at many retailers. If you don’t have a bank account, no worries. You can still enjoy the benefits of a digital wallet.
