Mobile wallets: Some basics worth knowing

Fraud Prevention

Do you use a mobile wallet?

Young people at an outdoor cafe; one of the young women is extending her phone over the waiter's hand-held payment device.Just like your everyday wallet, it’s a digital version on a smartphone, tablet, or watch. One of the ways you can use a mobile wallet is for storing your credit and debit cards digitally. Some mobile wallets allow you to simply hold your smartphone to a contactless card-reader to pay – you don’t even have to open the app! You may also discover security advantages.

As the usage of mobile wallets increases, I think it’s worth reviewing some basic information about them.

There are several well-known wallet apps. Apple Pay and Samsung Pay work with Apple and Samsung phones, PayPal works on nearly every phone, and Android Pay works across various phones that use the Android operating system. Microsoft Wallet is another option. Each of these can be loaded with all major credit and debit cards. You can use PayPal to pay at participating retailers; and Apple Pay, Android Pay, Samsung Pay and Microsoft Wallet can be used to tap and pay with your phone at retail locations that have contactless card readers. There are other wallet apps, too, including store-specific ones such as Starbucks and Walmart. Masterpass is another wallet that’s accepted at millions of stores, including online retailers.

Mobile wallets can also store your prepaid cards, loyalty cards, gift cards, and more. Some wallets (Google Wallet, PayPal) also link to your bank accounts and enable you to send money person-to-person from your bank. As always, take care to download the app from a trusted source.

The sign-up process is usually straightforward. As you would expect, there is a verification process to make sure the cards you want to register are yours. Each institution has its own methodology for checking a user’s identity: some will send you a text with a short code, others may ask you some authentication questions. So before enrolling, make sure your bank has up to date information about you. The process will also likely involve submitting a photo of your card(s) or entering the card data.

Mobile wallets offer improved security over physical payment cards. The best mobile wallets use tokenization and encryption to protect your payment information. Encrypting your data when payments are made means that your actual banking details are not transmitted, which is more secure than swiping a physical payment card. Also, the wallet can only be accessed once you’ve entered your PIN or fingerprint into your phone, which is more secure than opening a real-world wallet! However, you must protect your device via a PIN, password, or thumbprint that locks the home screen, just in case your phone is lost or stolen.

A few more advantages worth considering:

  • Increasingly, mobile wallets can also be used for online shopping.  That can make online checkout much more convenient — especially via your phone, as you don’t have to type in so many payment card numbers.
  • Mobile wallet apps can give you instant records of previous transactions, which is easier than logging in to check your credit card statement.

I’ve been using mobile wallets for a while now; and I really enjoy the added ease, convenience, and security. One last tip – make sure your phone is charged before you go out to shop!

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