What exactly is a digital wallet? It can be a convenient way to transfer and receive money without carrying a physical card or entering your credit card information online. However, not all merchants accept mobile or contactless payments, and your preferred digital wallet app may not function outside of your home country.
Here’s all you need to know about digital wallets and how to use them to make mobile payments or send money abroad.
A digital wallet is a digital version of a wallet or pocketbook. It’s normally a mobile app, but you may be able to access your digital wallet using a web browser and make purchases from other sorts of mobile devices, such as a smartwatch.
M-wallets are digital wallets that exclusively work on mobile devices, whereas e-wallets, or electronic wallets, work on a wider range of devices.
You can normally hold many cards in your digital wallet, or e-wallet, much as you would carry multiple payment methods in a physical wallet, such as a credit card, debit card, and cash in your local currency.
Digital wallets may be able to store, in addition to credit and debit cards:
- Gift certificates
- Loyalty certificates
- Cards for public transportation
- Tickets to a concert
- Boarding tickets
- Identification documents
- Bitcoin and other cryptocurrencies
Although digital wallets are not bank accounts, some may have a cash amount that you can top up with a debit card or link directly to your bank account.
How to Make Use of a Digital Wallet
Digital wallets can be used to pay a store, send money to friends and family, or even send money to oneself.
To get started, enter your bank account or credit card information into your digital wallet. Tokenization is a technique used by modern digital wallets to keep your card number secure.
Nonetheless, it’s a good idea to review your digital wallet provider’s security standards and to secure your digital wallet software with a passcode or face recognition tool like Face ID.
Once you’ve entered your financial information into your digital wallet, you can use it to make online and in-store transactions wherever credit cards are accepted.
Search for the contactless symbol.
Near-field communication (NFC) or magnetic secure transmission (MST) are the two most common contactless payment methods used by digital wallets. These technologies send a signal between your mobile device and the contactless card reader at the merchant.
In your digital wallet, select the “card” you want to pay with, then bring your device close to the card reader to begin the transaction.
If you’ve enabled biometric security, you may be required to unlock your smartphone using your face or fingerprint.
Make use of a QR code.
Some merchants may have a POS app that employs a QR code rather than an NFC payment terminal.
Customers in some parts of Asia, for example, can scan a QR code to view and pay their bill using a digital wallet.
Look for PayPal or other QR codes at the checkout counter to use this option.
Send money to family and friends
If your receiver uses the same digital wallet or a mobile banking app as you, you may be able to send them a payment by searching for their username, phone number, or other account information details.
Friends in the United States regularly “Venmo” one other their half of an expense, whereas Brazilians commonly use the Pix payment system for comparable day-to-day transactions.
However, digital payments normally only operate within a country’s banking system, so for international money transfers, you may need to utilize an app like Remitly.
The Benefits of Digital Wallets
Knowing how to utilize a digital wallet is essential if you live in or plan to visit a country that primarily relies on mobile payments. However, that is not the only incentive to learn how to utilize a digital wallet. Here are three more advantages to think about.
Carrying credit or debit cards in a real wallet might be dangerous. Even if you never misplace or lose your wallet, fraudsters may steal your credit card information when you visit an ATM.
Unauthorized card transactions are reduced by using digital wallets. They securely keep your payment information, and you may protect your card information from hackers by utilizing several kinds of verification.
If your phone is stolen, you can remotely disable your wallet, sparing you from having to cancel your card and wait for the issuer to give you a new one.
Using a digital wallet may also be more convenient than conventional means of payment. Depending on the sort of e-wallet you use, you may be able to monitor your balance and set up alerts and notifications straight in the app.
If you use a digital wallet that supports international transactions, you can avoid carrying cash and even converting currency.
Furthermore, you may use it to store items such as airline boarding passes and concert tickets, eliminating the need to worry about leaving vital documents at home.
Digital wallets can frequently process transactions significantly faster than other payment options. A check can take several business days to clear, and credit card payments may not appear on your account balance right away.
You may access your digital wallet at any time, so you don’t have to wait till your bank is open to make a payment. Many person-to-person transactions happen rapidly, especially if your recipient uses the same mobile banking service as you.
Examples of digital wallets
You’ve probably heard of some of the most popular mobile wallets in the world, such as AliPay and Venmo. Here are three of the most popular digital payment apps, as well as the devices that support them.
Apple Wallet is available on a variety of Apple devices, including iPhone 6 and later, as well as select iPads and wearable devices like as the Apple Watch.
It accepts contactless NFC payments via Apple Pay, which can be used for in-app purchases and web transactions.
Apple Pay is available in hundreds of countries worldwide, but keep in mind that your credit or debit card company may incur international transaction fees.
You won’t be able to use Apple Pay if you don’t have an Apple smartphone, but there is a similar digital wallet for Android devices. Google Wallet (previously known as Google Pay) also makes use of NFC and accepts contactless payments in a number of countries.
In some U.S. states, Google Wallet allows you to save everything from digital auto keys (particular models only) to your driver’s license.
Samsung has its own digital wallet for its products, which include smartwatches and smartphones. It accepts NFC and MST transactions, unlike Apple and Google Wallet.
Samsung Pay is now integrated into the Samsung Wallet app, which lets you store debit and credit cards from over 1,000 financial institutions. You can also keep your immunization record and utilize it to ride public transportation in New York City.
For international money transfers, use a digital wallet.
Digital wallets are a convenient method to pay for goods and services through a smartphone app or send money to friends and family. However, not all digital wallets accept foreign payments, and if they do, you may be charged international transaction fees.
If you need to send money to friends or family members abroad, an international money transfer service like Remitly may be a better option. Remitly provides international money transfers that are both quick and inexpensive.