How a mobile wallet can benefit your finances

Money Works By Cecilia Hendrix June 17, 2020

This article was created in partnership with Western Union.

The financial world is growing and improving at a faster rate than ever before, from new technology that helps to protect credit and debit cards from fraud, to chip and pin technology and the birth of the mobile wallet.

What is a mobile wallet?

At its very core, it’s a virtual wallet for users to store their payment information securely on a device, such as a mobile phone. This type of wallet manages all of your credit and debit cards, as well as reward and loyalty membership cards. As we see the relationship businesses have with consumers blossom in the digital age, mobile wallets are becoming more prevalent.

Benefits of a mobile wallet

One of the main benefits of a digital wallet is that it’s considered more secure than a physical wallet, according to the New York Times. Many argue that mobile wallets help to prevent fraud, as it’s believed that mobile wallets are harder to steal than their physical counterparts.

Physical wallet users also have to deal with the nightmare scenario of a lost wallet. This can easily happen to any of us, and the result can be incredibly damaging and inconvenient. The best-case scenario is that the lost wallet doesn’t contain a lot of physical cash, and the owner realises quickly enough to cancel their credit cards before any would-be thief can take advantage. A phone is harder to lose, and even if it does go missing, most users have a security system in place that renders the device unusable to a stranger.

Beyond these benefits, a mobile wallet also offers convenience. Struggling with a physical wallet, looking for a credit card, counting cash or waiting on the cashier to find your change are fast becoming things of the past.

The rise of digital wallet usage in the UK

A recent report from Ofcom found that half of all 10-year-olds in the U.K. now own a mobile phone. As they grow into teenagers and young adults, it makes perfect sense for them to look to their mobile device when making a payment. And, as of 2018, as much as 95% of U.K. households own at least one mobile phone, according to Statista data, which means that the same number of U.K. households have access to a mobile wallet.

A recent study by J.P. Morgan highlights that while physical cards still represent the primary payment method used within the U.K. at 53%, this number has remained static in recent years. The use of a digital wallet is making up ground on traditional payment methods, accounting for 25% of payments at the time of the report.

Tracking your finances in an increasingly digital era

As payment methods and finance in general move to digital, there are several ways people can utilise technology to keep track of their finances.

Many of these are apps, which offer users in-depth budgeting tools. For many people, the idea of creating a budget can seem daunting, but there are apps available to help you create a basic budget in less than 15 minutes. Additionally, some apps can provide users with an accurate snapshot of their finances after bills are paid, and other regular payments are also accounted for.

Another important aspect of personal finance that has dramatically improved with digital advances is the ability to quickly and reliably transfer money.

Gone are the days when transferring a sum of money to friends or family in another country was a time-consuming endeavour that meant visiting a bank or financial institution and taking days to process the order. The Western Union app has made sending money overseas convenient, quick and reliable. There is even an option available with the Western Union® app that allows for the transfer of funds to a mobile wallet in certain countries.

Whether you choose to keep your physical cards and cash or start leveraging the capabilities of a digital wallet, know that there are services out there to help you manage, move and budget your money effectively.