4 minute read
- Mobile wallets are becoming more popular every year
- E wallets are considered safe, but not 100% risk free, just like any other mobile transaction
- Digital wallets tend to be a convenient way to make a purchase when you leave home without a wallet or purse
What is a mobile wallet?
A mobile wallet, also known as an e-wallet or digital wallet is a “virtual wallet” (app) that lives on your mobile device instead of in a purse or wallet.
How do mobile wallets work?
In order to use a digital wallet, check with the merchant to confirm they accept mobile wallets for payment. Usually there is a sign or symbol for contactless payment near the terminal.
If accepted, a smartphone is placed near the credit card terminal. Mobile wallets rely on near-field communication, or NFC, which uses a chip in the mobile device to wirelessly communicate with the merchant's payment terminal. (1)The devices communicate using special short-term codes to verify customers' identities, but do not reveal actual credit card numbers. To complete the transaction, the user might need to confirm it by tapping the required button in the app or entering a password. Generally, this process varies from merchant to merchant and the mobile device must be compatible with the specific digital wallet. There also may be other restrictions depending on the mobile wallet.
Why are mobile wallets so popular?
Mobile wallets are becoming more popular every year. As of February 2020, 65% of young Millennials use a mobile wallet, compared to 59% in April 2020. In addition, 57% of Gen Zer's use mobile wallets, up from 50% in 2020. Covid 19 has increased the desire for contactless payments. According to Businesswire, because of COVID-19, there will be an eightfold increase in mobile payments between the years 2020 and 2024 — and that’s just in North America.(2)
More and more people are going cashless because they believe it is a more secure way of paying for transactions. If a wallet is lost or stolen, the cash is generally gone forever, but the cards in the wallet can be replaced, although usually not without a token amount of inconvenience.
Are mobile wallets totally secure?
While no mobile payment is without risk, digital wallets have several security measures that include biometrics such as: fingerprint ID, two-factor authentication, real-time notifications, and tokenization (depending on the model of your mobile device). However, transmitting data across mobile networks is never 100% secure, and transactions using a digital wallet will be subject to the risks intrinsic to the use of any mobile device.
Since the app’s security is supported by the device, it is crucial to ensure your smartphone’s strong protection, to prevent unauthorized purchases should the smartphone be lost or stolen. The digital cash society is becoming safer with emerging technology making it become more difficult for third parties to steal data like credit or debit card numbers.
What mobile wallets are the most popular in the USA?
The top mobile payment apps in the USA include: Apple Pay®, Samsung Pay, and Google Pay™. It is important to note that Apple Pay® and Google Pay™ restrict usage for children under the age of 13.
Does Family Money accept Apple Pay®, Google Pay™ or Samsung Pay?
Yes, Family Money Cards can be added to Apple Pay®, Google Pay™ and Samsung Pay for use at participating stores and on apps that accept Apple Pay®, Google Pay™ and Samsung Pay. This feature is only offered to children older than 13 years of age. In addition, the mobile device must be compatible with the mobile wallet of your choice.
Digital wallets keep gaining popularity as the most up-to-date payment solution. However, parents need to consider both the pros and cons and determine if their child is mature enough to justify adding a mobile wallet to their kid's personal mobile device.
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