Economically, it has been an interesting time for consumers in the US. With inflation hitting a 39-year high, many households are rightfully concerned about their spending. While there’s nothing to be done but leave it to the federal government and ride the storm, there is one increasingly-popular way in which individuals can take the reins on their own money: the digital wallet.
What is a Digital Wallet?
A digital wallet is essentially how it sounds: a non-physical way to store your banking cards and functionality. Digital wallets come in many different shapes and sizes: modern smartphones with RFID capability can store all of your card details, enabling you to contactlessly pay with each one; open banking solutions offer their own form of digital wallet, in managing regular and recurring payments with ease.
In essence, digital wallets use the power of online to give us security and convenience. But in what specific ways are digital wallets preferable to the real thing, or physical cash?
Less to Carry, Less to Lose
For starters, using a digital wallet more or less eliminates the need for you to carry a physical wallet. Wallets can be bulky things, carrying cash and multiple credit and debit cards, not to mention store credit and loyalty cards. Digital wallets can store all of your card information in one place – your phone.
This not only makes transactions much easier, thanks to less fumbling around in your wallet for the right card, but it also eliminates one of the key risks that comes with owning a wallet: losing it. With all of your information in one digital spot, misplacing your wallet no longer means trudging home empty-handed.
Better Security and Protection
Forgoing physical cards for a digital wallet drastically increases the security of your finances, in a number of a ways. A lack of physical wallet makes robbery less likely to impact your bank account. While contactless debit and credit cards can be used by thieves up to their payment threshold, many digital wallets require biometric data to access, making them inaccessible to anyone but you even if your phone is stolen.
Of course, unexpected payments often come from inside the house, with children a main culprit for swiping cards and making unauthorized purchases. With a protected digital wallet, your money is safe from your children and your children are safe from themselves.
Track Your Spending
Traditional banking services, useful as they may be, can make it difficult to keep track of your spending. Oftentimes, bank statements can take a number of business days to update with recent payments, meaning you don’t quite have a handle on your current financial situation. Digital wallets can offer their own form of financial updates, letting you know what’s been spent and where – letting you budget accordingly and without delay.
