You’ve likely heard of digital wallet apps like Apple®, Samsung® and Google Pay®, but all too often, they’re a feature that collects dust. While some people are suspicious of uploading debit or credit card information to a mobile app, the reality is, digital wallets are extremely secure, and they’re on the rise.
According to AARP, COVID-19 social distancing measures have contributed to digital wallets’ growth in recent months. 19% of U.S. survey respondents reported they made their first mobile payments in May 2020. In fact, digital wallet usage is growing so rapidly that the site reports users are expected to increase from roughly 36.4% of the U.S. population to 43.7% of the population by 2025.
If you’re on the fence about digital wallets, understanding their security features can help. Here are 4 ways digital wallets work to keep your account secure:
Tokenization Protects Your Card Information
When you swipe a physical credit or debit card at the store, they log your card information in their system, including your name, card number, expiration date and service code. While retailers do their best to protect this information after your transaction is complete, unfortunately, data breaches occasionally happen when retail systems are compromised.
A digital wallet alleviates some of this risk using a system called tokenization. Whenever you make a purchase with a digital wallet, the wallet generates a unique, single-use payment code. Instead of providing your personal information, this “token” code is only relevant for the immediate transaction.
Tokenization makes your data much more difficult to track and adds an extra layer of security to your payments.
Every Protection Your Phone Has, Your Digital Wallet Has
If you lose your wallet, it’s time to cancel your cards. It’s stressful, it’s frustrating and it’s unbelievably inconvenient. While losing your phone is similarly inconvenient, it’s far more secure than your wallet for three reasons.
First, Apple®, Samsung® and Google® all offer “Find My Phone” functions that allow you to easily locate your phone. According to a 2017 survey by Pixie, On average, Americans spend almost 2.5 days annually searching for lost items, including wallets. With a digital wallet, you can immediately secure your information and track your device more efficiently.
Second, while your wallet is full of information right at the surface, your phone hides sensitive information behind layers of encryption. By having a passcode or fingerprint lock on your phone, your digital wallet becomes impressively more secure.
Third, digital wallets offer several tools to secure purchases, ranging from passcode to biometric verification. Your information becomes much more difficult to access when you have a fingerprint lock blocking the way.
But let’s say you’re looking through your digital wallet on the bus. What’s to stop someone behind you from seeing your sensitive information? Fortunately, digital wallets do not display your full account number anywhere, meaning you’re safe from prying eyes.
Access From Anywhere
If you’ve lost your phone or it’s been stolen, you may be worried about someone bypassing the protections on your digital wallet. However, in the unlikely event that a stranger accesses your digital wallet, you can still prevent your data from being stolen. By logging in from another phone or device, you can freeze your digital wallet, preventing new purchases from going through. Let’s see the old billfold do that!
It’s no secret that some malicious apps seek to take information from your phone, but digital wallets protect against this by using a practice called sandboxing. Through this process, the digital wallet is isolated from the rest of your phone, so if something does go wrong with your phone, your digital wallet will remain separate and secure. The app only interacts with programs and apps within its “sandbox.”
SouthEast Bank now supports Apple Pay®, Google Pay® and Samsung Pay®, three of the most secure and trusted digital wallets. Now is the perfect time to give the digital wallet a try.
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Information contained in this blog is for educational and informational purposes only. Nothing contained in this blog should be construed as legal or tax advice. An attorney or tax advisor should be consulted for advice on specific issues.