Digital Wallet Know-How: Virtual Debit Cards

These days, you can do almost anything from your smartphone–video chat with friends, order food, watch movies, the list goes on. Many aspects of our lives are becoming increasingly digital, and wallets are no exception.

A digital wallet is a digital version of your financial accounts that is made easily accessible via your computer, smart device, or most commonly, your smartphone. The most popular digital wallets today are ApplePay, Google Pay, and Samsung pay, but there are many more options available.

What is a Digital Wallet, and How Does it Work?

Digital wallets use app software that links your payment details from your bank account to the vendor that the transaction is being made with.

To use a digital wallet, you must enter your card information into the app or site of your choice. Your information will then be encrypted, and you will only be able to use the digital wallet when you unlock your mobile device and authorize the use of it.

You usually use a digital wallet in a store by authorizing the digital wallet on your mobile device and tapping it to the card reader so your information can be transmitted.

You can store a lot in a digital wallet, including credit and debit cards, gift cards, concert tickets, hotel reservations, coupons, loyalty rewards cards, and more.

Different digital wallets allow different levels of access. Open wallets, which are accepted at most retailers, enable online purchases, contactless in-store payments, and cash back options. Semi-closed wallets, however, only allow transactions with a certain select group of retailers that have signed a special agreement with the respective provider. Closed wallets are wallets that can only be used for one specific company. For example, Walmart Pay can only be used in Walmart stores.

Advantages of Digital Wallets

A major advantage of digital wallets is their ease of use. Unlike with physical cards, you don’t need to type in all your personal information or scramble to find your wallet in the checkout line. Using a digital wallet makes the payment process much more seamless.

Using a digital wallet makes the payment process much more seamless. ”

In addition, your payment information is stored in a central location. The card number is never stored in the app itself—it’s assigned a unique virtual number. This adds an extra level of security, protecting your money even if your phone is lost or stolen.

Furthermore, having a digital wallet can make it a lot easier to manage all of your cards and keep track of your finances. Some digital wallets have built in tools to track your spending habits, allowing you to see what you’ve spent in various categories. You may even be able to set spending limits on certain cost categories to make it easier to stick to a budget.

Disadvantages of Digital Wallets

One disadvantage of digital wallets is that using one may limit the amount of merchants you are able to shop at. Not all merchants support digital wallets–in fact, in 2015, only 24 percent of merchants worldwide accepted mobile wallets as a payment method. As of 2018, 29 percent of merchants worldwide are still open to accepting this method as a form of payment. That is still a relatively low percentage of merchants accepting digital wallets. And even the merchants that do may only accept specific digital wallets. A store may accept ApplePay, but not Google Pay, for example.

In addition, digital wallets are not fully available worldwide. Each country has its own payment and transaction protocols, and the last thing you want is to be stuck in a foreign country with no way of paying for anything.

With a digital wallet, you will be more dependent on your device. If you forget your phone at home, or if it dies before you’re able to pay for something, you’re out of luck. Also, every digital payment gateway requires the internet, which could cause problems if that is the only type of payment you have available.

Features of Digital Wallets

What takes digital wallets above and beyond physical wallets are the features that you can gain access to by using them. Here are just a few of the potential features of wallet apps.

• Push notifications: these can inform you of new offers being run by the app and can give you a heads up on all transactions made through their account.
• QR codes: barcodes that you can scan with your phone. With QR codes in digital wallets, the payer can scan the QR code of the payee and immediately send them money, instead of having to enter all of the information into the app.
• User loyalty programs: typically special offers and loyalty points that reward you for using the app.
• Expense tracking: the ability to go back and view all of the transactions you’ve made, and possibly even see them broken down into categories.
• Chat support: customer support when users need it. Some digital wallets utilize artificial intelligence and neuro-linguistic programming (NLP) to aid customers when humans are not available.

Are Digital Wallets Safe?

When you imagine a digital wallet, you may think it is more susceptible to hacking and fraud.

Digital wallets can be more secure than your physical cards. ”

But believe it or not, digital wallets can be more secure than your physical cards.

With digital wallets, your mobile payments are encrypted and tokenized–which means that your card and/or account numbers are not actually stored in the digital wallet. Instead, when you add your information to a digital wallet, the data is converted into a unique code that can only be accessed by authorized entities.

In addition, digital wallets add in tokenization, which takes the sensitive encrypted data and replaces it with a non-sensitive digital equivalent, which is known as a token. These tokens are randomly generated every time a purchase is made, and only the merchant’s payment system can match this token and accept the payment.

What Next?

While digital wallets may seem foreign, they are more secure than physical wallets and offer a wide array of benefits that make them worthwhile. Using a digital wallet can add convenience and rewards to your life while making it easier to keep track of all your cards and manage your finances seamlessly.

Do you have an Amplify debit card? You may be able to add it to a digital wallet! As of right now, Amplify debit cards can be added to Apple Pay and Samsung Pay (we don’t currently offer a connection to Google Pay). Curious about what being a member of Amplify Credit Union can do for you? Talk to one of our representatives, or open an account today!

While digital wallets may seem foreign, they are more secure than physical wallets and offer a wide array of benefits that make them worthwhile. Using a digital wallet can add convenience and rewards to your life while making it easier to keep track of all your cards and manage your finances seamlessly.

Do you have an Amplify debit card? You may be able to add it to a digital wallet! As of right now, Amplify debit cards can be added to Apple Pay and Samsung Pay (we don’t currently offer a connection to Google Pay). Curious about what being a member of Amplify Credit Union can do for you? Talk to one of our representatives, or open an account today!