Do you use a digital wallet? If you have your card stored on Apple or Google Pay, you’ll be using a digital wallet. If you put your new concert tickets in your Google or Apple Pay wallet, you’ll be using a digital wallet.
Do you know how popular they are and why people are loving them?
Read on to find out.
Introduction to Digital Wallets
Digital wallets (or e-wallets) have revolutionised how we think about transactions. They let users store various payment methods securely, from credit and debit cards to bank details. All of it is accessible in a click or two, which doesn’t sound safe, but it is. PayID is one of the most popular ones, but there are literally hundreds more to choose from. For added security, many users opt to use browser-based wallets, which offer an extra layer of protection against cyber threats.
And now, it seems everyone uses them. In 2022, there were a recorded 3.4 billion global digital wallet users in 2022.
But it’s not just the convenience that’s appealing. It’s the advanced security features that make them stand out. In the first half of 2023, there were 112,459 attacks on personal banking accounts. Can digital wallets be the answer?
Advanced Encryption
Advanced encryption is essential, and it just so happens that digital wallets have exactly that.
When you transact using a digital wallet, your sensitive financial information is encrypted. It turns to complex code that’s nearly impossible for hackers to decipher. This encryption is an excellent barrier and line of defence.
Tokenization
Tokenization is another standout feature that traditional online banks and wallets will probably never offer. It adds an extra layer of security that’s almost unbeatable. Almost, because hackers can do everything, can’t they?
This technology replaces your actual account numbers with unique tokens during transactions. It’s almost impossible to guess. Remember, almost. So, even if a cybercriminal were to intercept the transaction, they’d only get their hands on the token. It’s useless outside of the specific transaction it was generated for.
Two-Factor Authentication
Two-factor authentication – love it or hate it. If you’ve been locked out of an app before and unable to verify using two-factor authentication, you’ll probably hate it.
Two-factor authentication might mean entering a password plus a code sent to your phone (a nightmare if you change your number) or using biometric data like a fingerprint or facial recognition. Consumers are big fans of biometric fingerprint authorisation. It’s rapid in comparison to other methods. How did we do life without it?
Continuous Monitoring
We love the continuous monitoring capabilities of digital wallets – and so do consumers. They’re so much easier to monitor than normal online banking. You can keep a closer eye on your money and transactions 24/7, and that’s what people want.
This proactive approach to security means any potential threats are identified and dealt with swiftly. Users have more peace of mind that their finances are constantly under watch.
Online banking systems and popular payment methods are lagging behind the times in this department.
User Control and Privacy
Digital wallets are great for user controls and privacy – there are so many more options than traditional banking apps. And people love that they have more control over their money. Or, at least, they feel like they do.
You can create custom notifications, set transaction limits, or freeze your digital wallet.
Personal data is more valuable than ever. Sadly, cyberattacks are more common than ever. Digital wallets are progressing to become safer than ever. The fintech industry is literally investing billions to do it. Yes, there’s a long way to go, but that’s because cybercriminals are becoming more sophisticated. But that’s an issue for another article.
Everyone is worried about cybersecurity – and rightly so. The statistics we gave you about the rise in cyber attacks and data leaks are incredible. Yet, as individuals, it’s not something we think about daily. We blindly agree to terms and conditions and assume our identity and money are safe. It’s the reason consumers are beginning to love digital wallets – they feel more cyber-safe.
