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What’s a Digital Wallet Anyway? – The Basics

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Applications of Digital Wallets

Times are definitely changing around the world and the shopping environment has certainly seen some. It used to be that everything you might want had to be made by hand and even perhaps bartered to finalise the transaction. This advanced to a system using actual gold coins then to the use of paper currency. Over time we came to have stores where everything could be purchased. We then found a way to simplify the shopping process with the introduction of debit and credit cards, allowing people to buy items without actually needing to pay for those items until later and stores installed sophisticated point of sale systems. Now it’s possible to purchase products that you want without ever leaving your home, by simply going online to find anything you want and have it sent to you from anywhere in the world. All of this progress has made it even easier for people around the world to shop and find the things they want.

With some new enhancements even carrying a credit card around may not be necessary. Now it’s possible to use something called a digital wallet to purchase anything you want.

What is a Digital Wallet?
A digital wallet is actually a lot like your regular wallet and your credit card all rolled into one. Instead of carrying cash or carrying credit cards all you need to do is carry around your mobile device or smartphone, which you are likely to be carrying anyway. You will be able to make purchases quickly and easily and you won’t need to carry anything extra around with you when you do. This makes the entire process of shopping much easier than you may have thought it could ever be.

Another aspect of the digital wallet is simply the fact that you are purchasing something in a way that does not require you to physically hand over a credit card or cash or divulge your information to every retailer you transact with. It only requires you to sign in to your mobile device, tablet, or smartphone to make a purchase. These mobile devices use a digital wallet to carry virtual cash and your credit card credentials – no physical card or money is required in order to pay for the product that you want. Instead, your credit information is coded and sent through the system to help you get the items and help the other person to get paid for those items.

How it Works
All you need to do for a digital wallet to work properly is link a credit or prepaid debit card to it. You can link a card of any type whether it’s a Visa, MasterCard, Discover or anything else. Once loaded, you won’t need to actually carry the card around with you anymore. Instead, you will just use your smartphone to make the payment directly to the merchant or to the company. This can be more secure than other methods of payment as well because you don’t need to carry cards or cash, only your phone.

A digital wallet doesn’t only need to be a traditional credit card attached to your smartphone. It can also be a special application on your smartphone that allows it to act as a payment device. These are apps like Apple Pay, Google Wallet, Square Wallet, Isis, Dwolla or Paypal. Each of these payments methods has to be in use by both the user (that’s you) and the person you are buying from.

Increased Security
One thing about using a digital wallet is that you have a more secure method of payment. You aren’t actually giving your credit card to anyone. You also don’t need to worry about carrying around a lot of cash. Cash and credit cards are easy to steal and once they’re taken they can be used by someone else which can hurt your credit as well as costing you money that you aren’t able to insure or get back. On the other hand, if you are using a digital wallet you won’t have to worry about this type of issue because if your phone is stolen no one will still be able to use your money.

The thing about a digital wallet is that if anyone gets your phone they will not be able to use your credit card because the card itself is not on the phone. This means they won’t be able to get your credit card information and they will need a code or security password in order to use the phone as a payment method. This means that your money is secure and no one can use it even if they manage to steal your phone. As a result, you’ll feel better carrying around this method of payment because you get additional security.

A digital wallet is definitely the future of ‘cash’ knocking on our door. It’s the perfect way to save your payment method, charge your purchases and keep your money more secure. You’ll be able to pay for all the things that you want without the need to carry around a wallet, cash, credit cards and (god forbid) cheques(!), with just your mobile device/smartphone. The entire process is simplified by using your smartphone, which you likely carry with you everywhere anyway, by just handing over your smartphone to be scanned, tapped, waved or other.

Digital Wallets and associated applications are still rather new however. That means you may not be able to find someone that takes them everywhere you go. Not all stores will accept this method of payment yet because it’s considered to be quite advanced. It will take time for a widespread adoption of digital wallet usage. That means you want to make sure that you are taking other methods of payment with you whenever you are intending to make a purchase, just in case your chosen vendor isn’t able to take your mobile payments just yet. The future will get here. It’s just not quite here yet.