Today’s consumers are catching on to the convenience of digital wallets. This modern technology allows consumers to make payments directly from their phones, eliminating the need for a physical wallet. According to a survey from Marqeta, nearly 60% of consumers are comfortable leaving their houses without their wallets and only taking their phones with them.[1]
Even though digital wallets can replace your physical wallet, you may wonder if they can also minimize your technology use. The answer is not so clear. We’ll decipher how digital wallets can streamline your purchases, including if they can cut down on the number of apps you use.
First, what is a digital wallet?
A digital wallet is software that stores payment methods on your personal device. Your smartphone comes with a pre-downloaded digital wallet—the Android mobile wallet is the Samsung Wallet, and the iPhone is Apple Pay. However, there are other digital wallet apps that you can download and use on your personal devices, like PayPal, Venmo, and Cash App.
Digital wallets make your life easier by condensing all your payment methods into one app. For example, if you forget your wallet at home, simply grab your phone and pull up the app to pay for your purchase. Digital wallets also store concert tickets, plane tickets, transit tickets, coupons, hotel reservations, and gift cards, making them extremely versatile.
Can you trust your digital wallet app?
Digital wallets use magnetic signals, QR codes, and wireless connectivity to process payments at a point-of-sale terminal. This technology is generally safe and trustworthy because it uses a variety of security methods to protect your personal financial information. For example, digital wallets use tokenization to encrypt your financials. Whenever you make a purchase online or at a store, your digital wallet shares a random token number that encrypts and protects your personal data. So, it doesn’t share your personal credit card number with the merchant. Also, digital wallets must be securely accessed with a password, like a passcode, PIN, Face ID, or thumbprint. To add extra protection, make sure your phone is password protected.
Some examples of digital wallets
Digital wallets don’t just refer to common payment apps like Apple Pay and Google Pay, but they also refer to specific store wallets, like Starbucks, Target, Walmart, and other popular chains.
Starbucks Digital Wallet
The Starbucks App and many other store-specific apps allow you to earn rewards with each purchase. You can upload a payment method or a Starbucks gift card to the app, making it easy to get your Pumpkin Spice Latte. However, only the Starbucks app tracks the points you earn with each purchase. So, you can only use your rewards if you purchase your Starbucks through the app.
Target Digital Wallet
Target introduced its wallet feature in 2017 so consumers can access coupons, discounts, and gift cards in one place. This is particularly handy if you are a frequent Target shopper. The Target app is ideal for finding coupons you might have missed, getting 5% off, and earning points and future rewards.
Samsung Wallet
Samsung Wallet is the only (as of October 2022) widely used digital wallet that allows its users to earn cash-back rewards. Samsung Wallet has deals with certain promoted retailers, so consumers can earn cash-back rewards if they shop at those retailers.
Will a digital wallet reduce my number of apps?
Since every store can have its own digital wallet, you might wonder if you can condense your number of apps. Although a digital wallet is extremely versatile, the app does not track specific store rewards. For example, you can only earn Starbucks rewards through their app, which is the same for Subway, Panera, Target, and other popular chains. So, even though digital wallets can simplify your life, it doesn’t necessarily reduce your total number of digital apps.
However, there may be a few other ways digital wallets may minimize your app usage. For example, digital wallets track your payment and purchase history, allowing you to see your latest purchases. So, if you don’t have your banking information easily accessible, just head into your digital wallet app to check out your latest purchases. This is a great and easy way to check for fraud or suspicious purchases too.
Digital wallets like Apple Pay and Samsung Wallet also store event tickets and boarding passes. So, you won’t need to download an airline or event app to access your ticket. Simply send your ticket to your email or text messages, and then add the ticket to your digital wallet app.
All in all, digital wallets are better known for minimizing paper waste and physical wallet use rather than reducing your number of apps. Regardless, digital wallets still hold the power to simplify your life. No matter which digital wallet you use, the apps help streamline your purchases and keep your financial information safe.
[1] Margeta 2022 State of Consumer Money Movement report [release]: 26 May 2022: https://investors.marqeta.com/news-releases/news-release-details/marqeta-study-covid-driven-digital-payment-adoption-likely-here
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