How Safe Is Your Digital Wallet?

Anyone who has done any type of online shopping knows the feeling. Tediously typing in all your payment info and making sure it is correct before being able to buy that thing you really want. Luckily, a digital wallet makes it so you only have to enter that information once. These wallets remember it all for you and fill out payment forms as you go.

But, how safe is your digital wallet?

Who Is Using a Digital Wallet?

Like many other online resources, the use of digital wallets skyrocketed since the start of the COVID-19 pandemic. One survey suggested 55 percent of consumers were using digital wallets, compared to just 38 percent of respondents before the pandemic. This isn’t surprising, considering the convenience that comes with digital wallets. Not to mention the increased demand in online shopping during stay-at-home orders.

How Digital Wallets Work

A digital wallet is an app that stores your credit card, debit card, or even gift card information. This allows you to make purchases quickly and easily. When you order online from a restaurant, supermarket, or retailer, you can pay through your digital wallet, selecting whichever payment method you choose. 

There are several types of digital wallets up for grabs. Google has Google Pay, Apple offers Wallet. Samsung allows its users to use Samsung Pay. Venmo and Paypal also offer similar options. They all work the same way: you sign up for the digital wallet, provide a username, email, and password. You can then access your wallet from your phone, laptop, tablet, or other devices. 

This saves you plenty of time, but are you putting yourself and your money at risk in doing so?

Is My Digital Wallet Safe?

For the most part, yes, digital wallets are safe and secure. The Identity Theft Resource Centre points to digital wallets’ two-factor authentication and one-time-use PIN numbers as reasons why you can trust these online wallets. They also say advanced encryption and virtualization techniques are used to ensure financial information never leaves the device you’re using.

Can A Digital Wallet Be Hacked?

While a lot of thought has gone into the safety of digital wallets, no technology is 100% effective. Thieves can still take advantage of your digital wallet, especially if you lose your smartphone or other device connected to that wallet. 

If you lost your phone and it fell into the hands of a thief, you’d have to depend on the safeguard you yourself put in place. If your phone or device isn’t locked with a password or biometrics, a thief could gain access to your digital wallet. They can then run up charges on your credit cards, or withdraw money from your bank accounts. Sometimes this can happen before you even realize your device is missing!

The number one way to protect your digital wallet is to lock your phone. Use a password, PIN number, or swipe code. Better yet, make use of biometric authentication which is an especially powerful form of security. To access your phone, you’d need to press your finger against it or have your face recognized by the device. It is far more difficult for thieves to unlock your phone when they don’t have your face or fingerprint!

There are also a variety of security apps you can install on your smartphone if it’s lost or stolen. Many of these apps can even lock your phone remotely, or erase any login info you have stored on your device. 

Finally, keep a keen eye on your financial accounts. Log into your credit card or bank accounts frequently and take a look at the list of transactions. If anything looks out of place, such as purchases you didn’t make or withdrawals you didn’t authorize, immediately report these transactions to your financial service provider.