01/08/2021 8:46 AM

What is a Mobile Wallet?

Your phone, wallet, and keys are the typical three necessities to take when leaving the house, but using a mobile wallet brings those items down to two. A mobile wallet is a virtual version of your wallet that stays on your mobile device and holds your payment information for easy use.

Keeping your credit and debit card information on your mobile device makes your payments convenient and safe. You won’t have to swap money or hand out a physical copy of your cards. In most cases, all it takes to make your payments is a quick tap of your device, and you’ll be all set.

As the world seeks convenience and progresses more into the digital age, keeping up with the trends can make life easier for you. Many business transactions are digital now, and using a mobile wallet is the best way to keep up.

What Kinds of Wallets are Available?

There are many different fintech (financial technology) companies around the world, with some being specific to certain countries. Despite the sheer multitude, they all fall into three distinct categories of mobile wallets.

Open Wallet

Either the bank or a third party uses this type of wallet. The money customers have stored in this wallet can be directly withdrawn as cash, or they can use the funds for transactions. Some popular mobile wallet examples of an open wallet fintech company are PayPal and Swish.

Semi-Closed Wallet

Semi-closed wallets do not allow customers to withdraw cash, but they can transfer the balance to their bank or use it at retailers with a contract with the fintech company. This typeof mobile wallet is the most popular in Eastern countries. An example of this would be Mobikwik.

Closed Wallet

Closed wallets are the most restrictive mobile wallets. One can only use funds in a closed wallet to complete transactions with a specific vendor or company. A prime example of this would be Amazon Pay.

How to Access a Mobile Wallet

With all of the technology involved, it sounds like it would be complicated or tedious to set up and use a mobile wallet. However, the process is easier than trying to set up a physical credit card. All it takes is a smart device and a plan.

Figure Out What You Need

Nothing is preventing you from using multiple fintech companies. You can use any of the three types of mobile wallets or even multiples of a specific one if it suits your needs.

Open wallets tend to be the most useful, and more and more stores accept them by the day. Just try to pick a popular one to guarantee that you are able to use it freely wherever you’d like. This is the most versatile option and can even be used from person to person.

A closed wallet is nice if you have a lot of transactions with that specific company. Amazon Pay is popular because of how many transactions the average person makes through Amazon. It’s not worth getting a closed wallet if you rarely spend money with the company offering it.

Download the App

Once you’ve decided which fintech company to go with, just download their mobile wallet app onto your mobile device. The setup rarely takes longer than a few minutes, and once you have your card or loyalty information saved, you’ll be all set.

Many of these apps require an additional security check to access them, so you can rest assured that a would-be thief or opportunist would have to both unlock your phone and then gain access to the app in order to compromise your funds.

What are the Benefits?

You may be wondering why bother getting set up with a mobile wallet when your current credit cards or cash have been working just fine. There’s nothing wrong with continuing down that path, but a mobile wallet has some benefits that the physical copies can’t provide.

Security

Using mobile wallet apps is actually much more secure than physical options. Any information you put in ends up getting encrypted, so potential hackers would have better luck trying to get credit card numbers from online stores rather than directly attacking your account.

It’s also far easier to steal or copy physical versions like cash or a credit card. With a mobile wallet, a thief would have to steal your mobile device, break into it if you have a password or some type of scan security, then get through a two-factor authorization to enter the app.

The only risk you run is losing your phone entirely. However, this runs the same risk as losing your physical wallet. With a lost phone, some apps allow you to find your phone or even wipe it so that no one can access your information if they manage to get into the device.

Convenience

It’s still a gray area right now, but many businesses and jobs are switching over to completely digital money handling. If trends continue, physical money will be fully phased out before too long. In the business world. It's better to get ahead of the game instead of struggling to catch up.

Everything else aside, paying with a mobile wallet is simply faster and easier than physical options. All it takes is a quick tap of your mobile device, and you’ll be walking out with your purchase. It’s also convenient for paying friends or family for minor debts instead of running to the bank for cash.

Conclusion

Mobile wallets are the future of financial technology and are advancing every day. Your first step should be to determine which type of mobile wallet will suit your needs, and after that, it’s as simple as downloading an app and getting your information all set up.

Using a mobile wallet is convenient for everyday transactions and can even speed up payments between friends and family. They are also far more secure than physical credit cards and have a multitude of preventive steps you can take to keep your information safe.