Why carry around a bulky wallet or purse when you can have all your cards and cash stored on your phone? Think of all the times you've misplaced or had your wallet stolen. According to 2021 research, 46% of people in the United States use their phones as their primary payment method.
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And with the youngest generation, digital wallets are becoming even more popular. A study by chain store age found that in 2019, 36% of Gen Zers used a mobile wallet, compared to just 18% of Baby Boomers.
Is it time to ditch your old-fashioned wallet for a digital one? Let's explore some of the advantages of using a digital wallet.
But first…
What Exactly Is a Digital Wallet?
A digital wallet is a term used to describe electronic payments or mobile wallets. It's a way to make transactions without using physical cash, credit or debit card. With a digital wallet, you can store your payment information, loyalty cards, and other information on your mobile device.
When you're ready to make a purchase, you can simply tap your phone on the contactless payments terminal or hold it near the terminal if it's NFC-enabled. The funds will then be transferred from your account to the merchant's account.
Some of the most popular digital wallets are Apple Pay, Google Pay, Paypal one-touch, and Samsung Pay. But there are also many other options available.
5 Advantages of Using a Digital Wallet
Gone are the days of fumbling through your wallet to find the right card. With a digital wallet, you can easily keep track of all your payment methods in one place.
Here are some the major advantages of using a digital wallet:
1. Enhanced Security
Through tokenization, digital wallets are the most secure form of payment today. Each transaction generates a unique code, making it difficult for fraudsters to access your personal or financial information.
Compared to plastic cards, which display your card number, name, and expiration date- a digital wallet requires a face-ID, thumbprint, or two-factor authentication, making it much harder to hack. In fact, a digital wallet makes payment easier by linking directly to your bank account or credit/debit card.
2. Better Expense Tracking
If you're trying to stick to a budget, using a digital wallet can help you keep track of your spending. You can account for every penny that leaves your bank account through your phone.
Most digital wallets will send you notifications after each purchase showing you what you bought, where you bought it, and how much it cost. This can be a great way to keep track of your spending and ensure you're not overspending.
When you use a physical card, it's easy to lose track of your spending. In addition, you may be less likely to question a purchase when you're using a card instead of cash. With a digital wallet, you can see your spending in real-time and make adjustments to ensure that you stay on budget.
3. Special Rewards for Going Digital
Reward points have become increasingly popular in recent years. And many companies are now offering special rewards for using a digital wallet.
For example, Starbucks offers "Starbucks Rewards," which allows users to earn points for every purchase made with their app. You can then redeem the points for free drinks and food items.
Other companies like Amazon and Walmart also offer rewards for using their digital wallets. So if you're looking to earn some extra points, be sure to take advantage of these offers.
Note: Check with the stores you normally shop with before getting rid of all your physical cards. You may want to keep one or two cards on hand just in case the merchants you normally use don’t accept digital wallets yet.
4. Time-Saver
Contactless payments are becoming increasingly popular and for a good reason. They're fast, convenient, and easy to use. With a digital wallet, you can simply tap your phone on the terminal and be on your way.
In fact, most SMBs are now accepting contactless payments to make the checkout process quicker and more efficient. With the help of a QR-code scanner, you can even pay without taking your phone out of your pocket.
Digital wallets are also great for online shopping. With a few clicks, you can complete a purchase without having to enter your card information. This is not only convenient but also much more secure.
5. Declutter Your Purse or Wallet
You don't have to carry around a physical wallet or purse when you have a digital one. A digital wallet can store all your payment methods, loyalty cards, and coupons in one place. In fact, you don't have to struggle to search for your cards or worry about losing them.
With a digital wallet, it is easier to find what you're looking for and keep track of all your payment methods in one place. In addition, many digital wallets allow you to store your boarding pass, train ticket, and other documents. So, a digital wallet is a great option if you're looking to travel light.
Bottom Line
Maybe it is time for you to consider getting a digital wallet if you have not done so already. With all of its advantages, it is hard to ignore its potential. Not to mention, with more and more businesses accepting contactless payments, it's becoming more accessible than ever to use a digital wallet. So why not give it a try?
