The Pros and Cons of Digital Wallets

Is there anything we can’t do with our phones anymore? Of course, we can use them to make phone calls and send text messages, but we also use them to take pictures, record videos, browse the internet, shop, check social media, and so much more. Now some people are even using their smartphones to replace their wallets and physical credit cards.

Over the past few years, digital wallets and mobile payments have started growing in popularity. As you stand at cash registers to make purchases, you may have started noticing that many credit card readers now offer the option of making mobile payments through digital wallets like Apple Pay or Samsung Pay. While many people still prefer to make their purchases the old-fashioned way, the ability to make mobile payments is certainly becoming more widespread. Would making the switch be worthwhile? Just like many other things in life, it has its advantages and disadvantages.

Convenience
Many features of smartphones help make our lives a little easier and more efficient and digital wallets are no exception. There’s no need to carry around a bulky wallet full of debit cards, credit cards, and store reward cards when you can simply store digital versions in your mobile device. If you’re trying to monitor your spending and stick to a budget, many popular budgeting apps can be linked to digital wallets so your spending will be recorded automatically, saving you the trouble of having to manually enter your purchases. When you make purchases, you don’t need to count out the right amount of cash or even swipe a credit card, all you need to do is hold your phone in front of the reader and you’ll be on your way.

Security
Although mobile payments have been an option for a few years now, many consumers are still hesitant to make them, primarily because of concerns over security. The security measures related to digital wallets and mobile payments have their benefits, but they haven’t been perfected yet. Phones are easy to steal, but on the plus side, digital wallets typically require some extra information on your part to access your cards, such as a PIN number or fingerprint, making it harder for just anyone to access your information. And if your phone is lost or stolen, you would have the option of locking down your digital wallet remotely.

The way digital wallets transmit your information when making purchases is another important security measure. According to Genisys Credit Union, digital wallets can help make transactions more secure because your card number is encoded as a digital token, which the store receives instead of a credit card number, reducing the risk that someone can use your card number to create a duplicate card. But while this is true, Wired explains that this type of tokenization isn’t 100% secure since it is possible for a criminal to access your digital wallet by cloning your phone or by creating malware to steal the information on your cards.

Battery Life
As convenient as digital wallets may be, one advantage an old-fashioned wallet will always have is that they are not battery operated. How many times have you gone to do something with your phone and realized that your battery level is much lower than you thought it would be? It’s happened to everyone at some point. Maybe your phone’s battery just isn’t holding a charge for as long as it used to or perhaps you’ve had an app running that used up a lot of your battery power. If you rely on a digital wallet and your battery dies, you’re out of luck if you need to buy something. But when you carry a wallet, physical credit cards, and cash, you’ll always be able to make your purchase.