What Are Digital Wallets? How Do They Work?

Finder reported 150 million Americans used digital wallets in 2021. Post-pandemic life made us find new ways to pay our expenses. Digital wallets are one of the fastest, most secure options we have.

If you’re not one of the 150 million, you might wonder, what are digital wallets? How do they work? Are digital wallets right for you?

Well, we have the answers. Read on for your digital wallet guide.

What Are Digital Wallets?

Digital wallets are apps that link to your bank account, credit, or debit cards. They let you make payments in the high street, online, and via apps without carrying your cards with you.

Payments Journal states 29 percent of USA consumers reported lost cards, theft, or fraud in 2019. With a digital wallet, you can keep your cards in a safe place. Use your digital wallet to go about your day.

You can track your spending and spot any suspicious transactions. You can pay or split bills. You can store boarding passes, tickets, and vouchers for when you need them.

How Do They Work? Digital Wallets Explained

First, you need to register your card or bank details. This is fast and easy with the best digital wallets. Your details are secure and encrypted.

With your details stored, you can leave your cards at home.

Want to pay via contactless in-store? Authorize it through your digital wallet. Now hold your phone over the contactless point, like a card.

Beep, done.

Want to split or pay a bill? Most digital wallets let you make fast payments to friends or businesses. You can get cashback and most online retailers accept digital wallet payments.

Are They Secure?

With the rise of contactless card payments, thieves can use your cards to pay in-store. Your bank limits the daily maximum, but it can still be significant.

Your digital wallet is protected by layers of encryption. First, your phone’s built-in security and password prevent thieves from accessing your data.

You then protect your digital wallet with advanced encryption. You can set up face ID, biometrics, and 2-step verification. Your details are unreadable to anyone but you.

You can block transactions, fast. Multiple cards? Digital wallets block all of them in minutes.

How Do You Choose the Best Digital Wallet?

Our digital wallet tips can help.

Look for digital wallets that let you pay bills from the app. You want to track what you’ve earned and spent in intelligent visualizations. You need top security.

The best digital wallets gain discounts as you spend. You can link them to transport apps like Uber. Look for live chats, alerts, and fast advice when you need it. 

Some digital wallets even let you access your salary two days early. Check it out now. It’s handy to keep in your back pocket.

Time to Go Digital

So, what are digital wallets? We hope our guide to digital wallets explained all you needed to know.

They are one of the best apps for our busy lifestyles. Who wants the stress of losing cards and overspending?

Save time and hassle. Get a digital wallet! 

For more business, tech, and lifestyle tips, check out the rest of our site. We have plenty more reads to boost your day-to-day.