A new survey shows that 60% of people are comfortable leaving their homes without their wallet and with just their phone. Since the start of COVID-19, the use of digital wallets has exploded in popularity. In fact, 75% of survey respondents said they had used a mobile wallet in the past year.
People are so used to contactless payments that more than half (56%) found having to enter their PIN difficult. The use of digital wallets has continued to grow in acceptance around the world. Here are some of the most popular digital wallets.
What is a digital wallet?
A digital wallet is software that stores your credit or debit cards on your computer, online service, or smart electronic device. Also known as an e-wallet, it allows individuals or businesses to conduct financial transactions electronically.
Digital wallets such as Samsung Wallet, Apple Pay and Google Pay allow you to store your credit and debit card information on the app. You can even store gift cards, loyalty cards, coupons, airline tickets, event tickets, and more. The mobile payment system allows you to use your smartphone or smartwatch in retail stores equipped with compatible card readers.
How does a digital wallet work?
Apple Pay and Google Pay use Near Field Communication (NFC) on your smartphone or smartwatch to allow two different devices to exchange information. As long as the merchant has a compatible credit card reader, you open the app on your device and hold it near the reader to make the financial purchase.
Samsung Wallet uses both NFC and Magnetic Secure Transmission (MST) to transfer your card information. MST generates a magnetic signal, similar to the magnetic stripe on the back of your credit or debit card to complete the payment. The advantage of MST is that you can use it anywhere there is a traditional card machine, the retailer doesn’t have to upgrade like they would with NFC.
Other digital wallets like Paypal and Venmo use a QR code, similar to a barcode that you scan with your phone’s camera for financial transactions. Some companies use a “closed digital wallet” like the Starbucks and Amazon Pay apps that allow you to only pay for things on the company’s site. You still get all the rewards and benefits of your card when you use it through a digital wallet. There are no fees when using a digital wallet.
Are digital wallets safe?
In addition to their convenience and speed compared to a regular wallet, digital wallets are considered more secure than a credit card. Digital wallets use a process called “tokenization”. Your real cards are not stored in your e-wallet. They use an encrypted version of your card made up of random numbers during transactions. Your personal information is not shared with merchants. The apps also require you to authenticate with a fingerprint sensor, PIN, or iris scanner before you can use it to make a payment.
The best digital wallets
According to its website, Apple Pay is already installed on any Apple device and is accepted by 85% of retailers in the United States. You can use Apple Cash with Apple Pay, a digital card that stores money you want to send to friends or family. You can send money from your Wallet or Messages. The contactless payment app has privacy and built-in features and can be used to make in-store, online or in-app purchases. Apple Pay has nearly 44 million members and accounts for nearly half (45.5%) of all in-store digital wallet purchases.
Google Pay is available for iOS and Android devices. The app lets you stay connected with your favorite vendors, view your past transactions, and add loyalty cards, gift cards, event tickets, and more. You can link your bank, Gmail, and Google Photos accounts to better understand your spending habits. Users earn cash back when they activate business offers and make purchases. Privacy and security are built into every payment, and you can send money to a friend or create a group to share expenses for dinner, bills, rent, and more. Google Pay will help you do the math and find out who gets paid. Twenty-five million people use Google Pay.
Samsung Wallet is a mobile payment system that lets you use your smartphone to pay at retail stores around the world. Samsung states that Samsung Wallet is accepted in more places than most other mobile payment methods due to its MST and NFC technology. Samsung Wallet is available on Galaxy smartphones and Samsung smartwatches. The app also offers a rewards program for users. You can add gift cards, event tickets, and get discounts at different businesses using the app. Samsung Pay Cash lets you create a virtual card that you can use for transfer purposes or as a virtual prepaid card after linking it to your bank account. Samsung Pay has 16.3 million users.
PayPal is a widely used online application and website available for iOS and Android. You can securely send money around the world. Its “Pay in 4” program allows you to split your purchase into four installments without interest and without late fees. PayPal offers rewards when you use the app. It allows users to see their past transactions to track their spending. Many online sites allow you to choose your PayPal account for payment, which speeds up the checkout process. Since over 200 countries use PayPal, the app has an automated currency conversion process. Besides making purchases, you can use the app to send money to friends and family. Paypal has 429 million active user accounts.
Venmo is another popular mobile wallet app available on iOS and Android. There are 83 million users using the app for quick and easy transactions. Venmo was first launched as a way to send and receive money to friends and family. You can send money with the app via SMS and you can keep your financial transactions private or public. You can sync the app with your social media sites, contacts, etc. You can link the app to your bank account and Venmo credit card. You can also earn up to 3% cash back or even automatically buy any crypto you want from your Venmo account.
There are many other popular digital wallets, such as Zelle, Cash App, and Dwolla. With the rapid rise of e-wallets, more businesses and consumers are embracing the technology.
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