Digital wallets are software applications that let customers make a purchase using a device that has the application installed, which is typically one’s smartphone. The application applies a digital signature to the transaction, which encrypts all data in a session that only lasts as long as the transaction does. There are some advantages and disadvantages to this system, which this brief guide will help you to learn.
First, let’s look at the disadvantages. A digital wallet currently relies on hardware, like your phone, to work. If your phone’s battery dies, what then? Network connectivity can be another issue, but retailers may adapt by adding wifi to their stores. Companies also have to invest a significant portion of revenue to get the infrastructure they need to process transactions with a digital wallet.
The benefits far outweigh the disadvantages, so it’s most likely a matter of time before these systems are implemented. They offer safe encryption at the terminal, and better security for your payment information. With everything localized to your phone, you’ll need to secure only that device. They are easy to use as well, often completing transactions within a tap or two. You never need a physical wallet, so there are no cards to worry about losing. Plus, the all important benefit to the consumer: shorter lines at the checkout stand.
Digital wallets are already found in our modern economy, but we tend to use them for transferring money online. Soon, we’ll utilize these important applications for far more than simple money transfers.