Top Security Features of a Digital Wallet

Shopping, splitting a dinner bill with friends, and sending money to family are now easier than ever thanks to the convenience of a digital wallet. Also called an “e-wallet,” a digital wallet combines the traditional features of a credit or debit card with the benefits of an app.

Your account information is kept inside the  digital wallet, usually in a secure app stored on your phone. This allows you to scan, swipe, or tap your phone to make a payment. Some e-wallets also allow you to transfer funds or send a digital payment to friends and family. But this raises the question: how does a digital wallet secure private information?

Let’s explore some key security features a digital wallet can include:

Safety features of a digital wallet

While most people switch to digital wallets so that they can leave their plastic cards at home, this technology comes with some added security benefits. Many digital wallets offer:

🔒 Encryption

Encryption technology locks data before sending so only an authorized user can unlock it. In other words, only those with the right encryption codes can access your payment when using a digital wallet to send money. This also prevents hackers from getting at the numbers stored in your app.

📱Contactless payment

This feature makes paying at the counter for your coffee or movie tickets easy. It also reduces the need to carry a physical card around. With no card to drop or leave behind, you’re helping keep your data safe. Contactless payments don’t get “swiped.” Instead, this allows you to simply tap or wave your digital wallet above the card reader.

🔍 Fraud monitoring

Like your standard credit or debit cards, most digital wallets have at least some fraud protection or monitoring. If someone does happen to access your account, you may be notified — either through alerts you set up or by issuer of the wallet.

👤 Enhanced login

It’s not enough to protect your accounts with passwords these days. When available, adding a personal identification number (PIN), two-factor authentication, and biometric authentication can help. These make hacking your account much more complex, thereby deterring hackers. If you don’t feel comfortable using facial recognition or fingerprint scanning, setting up two-factor authentication with a separate phone or email can help protect your account.

While digital wallets aren’t 100% safe, they do have extra layers of protection. You may find them safer than bringing your credit cards out in public.

How to use digital wallets

Using a digital wallet is easy once you set it up. There are two types of wallets:

• Single-use wallets: These include apps where you can only store gift cards for that particular retailer. You may be able to link a credit or debit card, but the wallet is designed to help you shop safely at that retailer through their app. With single-use, you can’t use the wallet to shop at other stores.
• Multi-use wallets: Multi-use wallets connect any number of credit or debit cards, banking accounts, and even ticket companies. You can access any linked financial account through the app. These may allow you to send money, make purchases directly from your phone, or monitor your accounts all in one place.

Choose a digital wallet based on how you plan to use it (it’s important to understand the differences in a digital wallet vs. a bank account). If you plan on sending money to family overseas, you’ll want one that handles wire transfers or bank payments. Many apps on the market may do this, but only for select countries. You’ll need to be sure that both you and the recipient can access the app or the accounts connected to them.

Helpful tip: Look for fees the digital wallets may charge for sending or receiving money. It’s important to know that some charge differently for payments to friends and family versus when making a purchase.

Another option is to send directly to someone’s digital wallet from your bank account or card with services like Ria Money Transfer, a convenient option for international money transfers. We’ve even launched the Ria eWallet for use in Malaysia!

Digital wallet safety tips

Once you’ve set up your wallet, consider these methods for keeping your money safe:

• Use strong passwords that you don’t use anywhere else.
• Set up two-factor authentication.
• Update your digital wallet app regularly.
• Don’t send money from your app on unsecured public Wi-Fi.
• Check your account activity regularly and look for unauthorized transactions.
• Only use reputable money transfer services to send money to friends and family.

Secure payments on the go

Consumers are increasingly ditching plastic cards for more convenient digital wallets, and today’s smartphones make it easy to get started. Being smart about how you use your digital wallet can protect your accounts and help you make purchases or receive money on the go.

You can use the Ria app or website to send money to a loved one’s digital wallet — get started today!

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