The pros and cons of using a digital wallet

In about a decade, digital wallets like Apple Pay and Google Wallet have gone from niche options at cutting-edge companies to payment methods accepted almost everywhere. You’re encouraged to fill out your virtual wallet with credit cards when setting up a new phone, and almost every major card company participates.

There is no “best” digital wallet to use, as the ones you have depend on your devices. Apple Pay is the option on the company’s platforms; on Android, it’s Google Wallet. Samsung device owners can also try Samsung Pay, which offers better integration with those phones but isn’t as widely compatible as Google’s offering.

Digital wallets have many benefits, as well as a few limitations to consider. You don’t want to get any nasty surprises when you try to pay, which is why digital payments should rarely be the only option you have. Putting a few payment methods in your phone’s wallet is worth having a backup to start with, but you’ll probably want to take full advantage once you get used to digital payments and start discovering their hidden benefits.

Having your payment cards on the same device that you already carry everywhere means you can lighten your wallet, or even avoid carrying it altogether in some cases. If you use a card for a specific retailer, you don’t have to carry it with you at all times. Or if you have many credit cards to take advantage of different rewards programs, digital wallets allow you to choose the right one for you to get the most cash back. Speed ​​is also part of it; contactless payments are almost instantaneous, compared to waiting several seconds for a chip reader. And with the Apple Watch and many Android smartwatches, you can even pay from your wrist instead of your phone.

Digital wallets aren’t limited to credit and debit cards either. Concert tickets, store loyalty cards, boarding passes, and digital hotel room keys are some of the other items they can hold. Look for it Add to Apple Wallet Or Add to Google Wallet in compatible apps to keep them all in one place. In some states, you can even add a digital ID to Apple Wallet or Google Wallet. Compatible cars also offer digital keys.

Besides in-person transactions, transactions on your phone (and other devices) are also more convenient with digital payments. In participating apps and websites, you can pay with Apple Pay (or similar platforms) in one step. There’s no need to fill in your card details and contact details on each new site, saving time and avoiding typos.

The other major value of digital wallets is their security features. If someone steals a physical card, they can use it to make smaller purchases that typically don’t require authentication. Many stores don’t even ask for a signature, much less check that it matches what’s on the card. On the other hand, someone who steals your phone can’t use your digital payment methods because they are protected by your device’s PIN or facial/fingerprint scanning.

Mobile payments offer the same security protections as chip cards or contactless card tapping. These methods create a unique transaction identifier (called tokenization) that is useless if stolen, instead of exposing all of the actual card data like magnetic stripe swiping does. However, digital wallets add an extra level of security by storing a unique number for each card, which is not linked to the real one.

Contactless payments with your phone also reduce the potential risks of using a physical card. If a chip reader fails, you can swipe the card as a backup, which is the easiest method scammers can use to browse card information. Although minor, there’s also no risk of you forgetting to put your phone back in your pocket, compared to accidentally leaving a card in the chip reader.

If you lose your phone, you can mark it as such using the online portal to disable card access. Marking a device as lost doesn’t remove cards from other devices (so you can continue to use Apple Pay on your Mac with a lost iPhone, for example). Similarly, you can deactivate a lost credit card through an online banking account, but that requires waiting for a replacement card to arrive in the mail, and the old one will be deactivated wherever you use it.

Finally, keeping your payment information in one wallet reduces your attack surface compared to entering it on every website you shop on. Every place you allow your payment information to be stored is another that could expose it if hacked.

Digital payments aren’t accepted everywhere, so it’s always a good idea to carry at least one physical card and some cash. Even if a retailer accepts credit cards, readers may not have the NFC scanners needed for mobile payments. When shopping in unfamiliar places, you don’t want to find yourself unable to pay.

Tools like Apple Pay and Google Pay work even when your phone doesn’t have an Internet connection. However, they require your device to have power, so if you run out of battery, you’ll need another payment method. One small exception is Apple Pay’s Express Mode feature, which allows you to scan digital car keys, transit tickets, and other passes even when your device is locked or discharged. Apple says it works “up to five hours” after your device turns off due to low battery, but it doesn’t work if you turn off your phone manually.

Most potential security risks with digital wallets come from social engineering and not from flaws within the platforms themselves. Someone is more likely to try to trick you into sending them money via Apple Cash than to break into your Apple Pay setup. Other general safety tips also apply. For example, it is better to use credit cards rather than debit cards in mobile wallets because credit card fraud does not immediately take your own money.