Digital wallets are a modern online payment solution that enable consumers to purchase goods and services across the internet at the checkout or cashier section on e-commerce websites from their preferred smartphone, tablet, laptop, or desktop computer.
As well as being able to pay for items with digital wallets, they can also be used for many other things, like sending and receiving money and buying, holding, and trading cryptocurrency.
Let's dive straight in and take a closer look at some of the security benefits digital wallets offer and reveal why they have become a preferred online payment method for millions of people across the globe.
What is a digital wallet?
A digital wallet is essentially an electronic payment processing service or financial transaction application/software program that runs on any Wi-Fi/internet-connected desktop computer or mobile device.
Digital wallets are also often referred to as mobile wallets, web wallets, electronic wallets, or eWallets. It all means the same thing.
People mainly use digital wallets to pay for goods and services at websites instead of using other more traditional online payment methods like credit and debit cards, bank transfers, prepaid voucher cards, or Buy Now, Pay Later (BNPL).
There are three different types of wallets, which include the following:
- Closed wallets – these digital wallets are created by online businesses like Amazon's Amazon Wallet, which allows its customers to pay for goods and services on that site alone
- Semi-closed wallets – similar to above, but these digital wallets can be used to pay for items on several specific websites only
- Open wallets – these ones can be used at the checkout on hundreds of thousands of websites and are issued either by banks or fintech companies that are partnered with banks, like PayPal, or Revolut, which is a particular favourite for gaming enthusiasts on fully licensed and regulated iGaming websites like 32Red
Each different type of digital wallet comes with its own security benefits, levels of convenience and efficiency, user-friendliness, unique features, rewards, and device compatibility and accessibility (for example, Apple Pay can't be used on Android devices, and Samsung Pay can't be used on iPhones, etc.).
What are the security benefits of digital wallets?
Digital wallets have been a significant game-changer in the payment processing sector in several ways, especially with how people transact online.
They provide a reliable and secure way for users to store their payment information and use extremely high levels of encryption to keep your money and other sensitive personal data safe.
Paying with digital wallets reduces the risk of fraudulent activity and stops cybercriminals from hijacking your payment and stealing your money or personal information.
As an added layer of account security, they utilise several authentication methods, such as 2FA (two-factor authentication). They also usually require a unique six digit pin – that's on top of your username and password login credentials, which is known only to the user.
When purchasing items online with digital wallets, payments can be done either instantly in your web browser or from within a perfectly secure app. Today's most popular mobile digital wallet apps are usually compatible with most modern iOS and Android smartphones and tablet devices.
Better still, before you even download and install the app onto your preferred mobile device or start using the services of today's most trusted digital wallets, you must go through a strict ID authentication and verification process to ensure your legitimacy and eliminate the chance of accounts being opened fraudulently in your name.
This layer of verification and authentication fosters a sense of trust. It is one of the main reasons why digital wallets have become the payment method of choice for so many people across the globe.
Final thoughts
Today's most secure digital wallets that many of you will already be familiar with by now, apart from PayPal, Apple Pay and Samsung Pay, are Google Wallet (formerly Google Pay), Cash App, Venmo, Skrill (formerly MoneyBookers), Neteller, Jeton, Web Money, MuchBetter, Trustly Wallet, Payz (formerly ecoPayz), and AstroPay Wallet, to name a few.
They offer consumers a reliable way to pay for items online. They often allow you to track your electronic payments and can be used from almost any location on the planet. They are hassle-free, convenient, reliable, perfectly secure, and quick at processing transactions.
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