In today’s fast-paced digital world, convenience and security determine every financial decision. One of the most significant innovations in personal and business banking are the digital wallets. Digital wallets have transformed the way people manage their finances and the way they pay. Cash is no longer king and where plastic cards and contactless pay use to be considered fast and safe, they have now been replaced by something even faster and much more secure.
But, what makes digital wallets such a life-changing tool? Let’s find out what the benefits of using a digital wallet app are and understand why more people are embracing this new technology.
1. Convenience: Payments in your pockets
There is no need to carry your physical wallet that is filled with debit cards, credit cards, cash or even your identification card. When using digital wallets, you can just leave it at home. In a digital wallet app you can store multiple cards in just a single device and choose what you want to use as your payment. This eliminates the need to search through your physical wallet to find the cards you want, the cash you need or remembering your PINs.
- All-in-one storage: Digital wallets don’t just store card information. Many allow you to keep loyalty cards, tickets to events, boarding passes, transportation passes and even your identification card. This reduces the clatter in your bag. Now you just take your mobile phone and you are ready to go.
- Always with you: Since people are depended on their mobile phone and carry it everywhere with them, your digital wallet is always available. As long as you have your phone, you can easily pay.
- No need for exact change: Digital wallets allow you to pay the exact amount you owe without the need to look for cash or coins.
2. Speed
With digital wallets the transactions become even quicker. In physical stores you just use your phone and with just one move you have paid and you are ready to go. Especially concerning online purchases, with digital wallets, you don’t have to manually insert your debit or credit card details. This makes the checkout process faster and streamlines your online experience. For both physical and online purchases, digital wallets provide speed that is important in today’s fast-paced way of life.
- Pay and go: Digital wallets support NFC (Near Field Communication) technology. This allows you to hold your smart device near the card reader and instantly pay, taking only a few seconds.
- Online shopping made easy: Instead of entering your card number (all 16 digits), expiry date and CVV code every time you want to shop online, a digital wallet enables auto-filling the details, speeding the checkout process.
3. Security
The most important of the benefits that digital wallets offer is security. This might surprise you, but digital wallets are often more secure than traditional payment methods, such as cash or debit/credit cards.
- Encryption and tokenisation: When you make a payment, digital wallets don’t transmit your actual card number, instead they use a “token” (a randomly generated number that replaces your actual credit or debit card number) that replaces your sensitive data, minimising the risk of your card details being stolen.
- Biometric authentication: Digital wallets require biometric authentication, such as face recognition, fingerprint or passcode before proceeding with the payment, adding an extra layer of security.
- Instant notifications: With instant notifications on every transaction, you will be able to have better control over your finances and pinpoint easier frauds.
- Reduced risk of physical theft: If you lose your wallet, all your cards and credentials are gone for good. However, if you lose your mobile phone you can remotely lock and sometimes delete your digital wallet. Additionally, digital wallets usually require an extra password or biometrics to log in. so even if you lose your phone there is an extra layer if security if someone manages to unlock your phone.
- Fraud detection: Many digital wallets are integrated with your bank card directly. This provides you with instant, real-time alerts and fraud monitoring.
4. Mobility
The mobility that digital wallets offer can be considered a game changer, as they allow you to perform payments and even travel without being dependant on cards, cash and credentials.
- Global acceptance: Even more businesses accept digital payments from big chains to small family owned businesses making contactless payments the default in many cases.
- Functionality through different devices: Making payments is not limited to just your mobile phone. You can use your smart watch or your computer, any device that can linked to your digital wallet, offering you more flexibility. Just imagine going for a run and you want to buy a bottle of water, you can just do it with your smart watch.
- Travel made easy: Nowadays you don’t have to arrange for exchanging foreign currency, as many digital wallets are accepted abroad and many support multiple currencies.
5. Accessibility
One of the major benefits of digital wallets is accessibility, especially for people in remote areas, where they don’t have easy access to traditional banking services.
- Easy to setup: A digital wallet requires a smart device, an internet connection, but also for the bank to be approved in participating in the wallet app, making it easier for people to participate in the financial system.
- Anytime access and from everywhere: With digital wallets you can have access and make payments anytime and from everywhere in the world, as long as you have an internet connection. In some cases, you can even pay without an internet connection, like on airplanes or boats, as digital wallets can often hold a limited number of offline transactions that are processed and updated once an internet connection is re-established.
6. Environmental impact
Apart from the benefits for individuals and businesses, digital wallets also have a positive environmental impact. While the shift to digital wallets will not solve the environmental crisis, every step towards reducing plastic helps contribute to sustainability.
- Reduce plastic: Digital wallets reduce the demand for plastic cards over time.
- Reduce paper: Using digital wallets eliminates the need of cash, hence the need for paper in order to produce banknotes.
- Eco-friendly travel: there is no need to print your boarding passes when you travel, as you can add them to your digital wallet, depending on the airline.
7. User friendly
Being so user-friendly is one of the many reasons that digital wallets have been adopted so quickly by people.
- One-time setup: You will only need to link your cards once (until their expiration date) to your digital wallet. After that, you can use it daily by hovering your smart device over a point of sale or clicking a button online.
- Instant notifications: Digital wallets send instant notifications for transactions helping you keep track of your spending in real time.
- Simple design: Most digital wallets are simple to use, even for people who are not tech savvy. They have clear menus and step-by-step instructions for making it even easier to use.
8. Contactless payments
Due to the Covid-19 pandemic, the shift towards contactless payments was accelerated.
- Hygienic: With digital wallets you don’t have to handle cash to pay or even keypads to enter your PIN at a point of sale or ATM. With just a quick hover with your smart device you are set to go.
- Widely accepted: Retailers, restaurants, transportation systems, even vending machines are now compatible with contactless payments.
Digital wallets are not just a temporary trend, they represent the future of payments and way of life. Their benefits make them superior to traditional payment methods. By using digital wallets, you can gain more control over your finances.
