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What is a digital wallet?
26th April, 2022 |
With cash-based payments suffering a big drop during the recent pandemic, there was a huge growth in anything which reduced contact during transactions. Many tech commentators believe our habits in this area will never return to pre-pandemic levels. Among these game-changing solutions, they don’t come much better than so-called digital wallets.
If you’re an iPhone owner you’ll no doubt have heard about Apple Pay and other similar services. But have you taken the plunge and started using them yet? They offer the opportunity to make payments in stores, online, or via an app with just a wave or tap of your trusty device. So, how do you set up your digital wallet and which one should you choose? Keep reading to find out more.
While you’re being wowed by the possibilities of going digital, don’t forget to invest in some iPhone insurance while you’re at it. Contact the Gadget Cover team and we promise to make iPhone insurance as simple as possible. Leaving you much more time to think of fun ways to spend your hard-earned cash.
What is a digital wallet?
They’re pretty much exactly what you would expect them to be. A normal everyday wallet sits in your pocket or bag. Whereas a digital wallet is a payment tool that sits in an electronic device such as a laptop, smartphone or smart watch.
Usually accessible through an app, the digital wallet securely stores all your payment details in one location. Making it much easier, safer and quicker for you to transfer funds, shop online or make a cashless purchase – in a shop, train station or wherever.
As well as securely storing details of your online payments systems, such as PayPal or Google Pay, it can also be connected to your traditional bank account. In this way it can hold virtual versions of any of your debit and credit cards. So, you never again have to enter those tiresome card details or carry a physical card to make payments.
Just like a ‘normal’ wallet you can even use it to keep items such as concert tickets, boarding passes, and vouchers safe. Simply save digital tickets and e-vouchers to your digital wallet, so you always have the documents you need to hand. Brilliant for those who love travelling light or who have a tendency to lose things!
How to set up a digital wallet
Setting up a digital wallet on your smartphone is super easy. Simply download or open the wallet you want to use and add as many payment methods as you would like. Many people use different payment methods for different items.
You might use a store card in some places, a credit card in others, and your debit card elsewhere. Each of these payment methods have their own benefits and having them all in one place means they’re much simpler to use.
There are plenty of digital wallets out there but three of the most popular are Apple Pay, Google Pay and Samsung Pay.
So, here’s a quick step-by-step guide to setting them up.
Setting up Apple Pay on your iPhone
First off, if you want to use Apple Pay then you’ll need three things:
- A compatible device. This could be an iPhone, iPad, Apple Watch or even a Mac. To find out if your device is compatible, you’ll need to check the Apple Pay support page. All iPhone models after the iPhone 6 or iPhone 6 Plus with Face ID or Touch ID will let you use Apple Pay. Apple Watch Series 1 and later and iPads with Touch ID or Face ID can also be used for purchases and payments. Finally, Mac models with Touch ID can also be used.
- A supported payment card from a participating card issuer. Debit and credit cards from many of the UK’s largest banks will work with Apple Pay. However, there might be a problem with small or less well-known banks. If you’re unsure, contact your card issuer to check.
- An Apple ID signed into iCloud on the device you want to use. On whatever iOS device you have, you’ll need to set up Face ID, Touch ID, or a passcode. If you have an Apple Watch, you need to set up a passcode. Be aware that if you sign out of iCloud or remove your passcode, all credit, debit, or other cards will be removed from the device.
Once you’ve checked you have everything necessary, then it’s time to add whatever credit or debit cards you wish to use. To add a new card for Apple Pay to your iPhone, follow these steps:
- Open the Apple Wallet app on your iPhone.
- Hit the Add button.
- Tap Debit or Credit Card and hit Continue.
- Follow the screen prompts to add a new card. When asked, select your bank or card issuer from the drop-down list. You can also find them using the search function.
- Go through the verification process with your bank or card issuer. They might ask you to enter a unique code from a text message, provide additional information, or download an app before approving your card for use with Apple Pay.
- Now you’re ready to go. If you have a paired Apple Watch, you’ll also have the option to add the card to the digital wallet on your device.
Adding cards to Apple Pay using your Apple Watch, Mac or iPad are slightly different. The simple step-by-step procedure for doing so is set out on the Apple Pay support page.
If you’re having problems adding a card to your Apple Wallet to use with Apple Pay then go to this Apple help page for further advice.
Apple has a vast array of great gadgets on offer including Apple Watches and iPads, but they can be expensive. Make sure you arrange gadget insurance alongside iPhone insurance so all your tech is well covered.
Setting up Google Pay on your Android phone
To set up Google Pay on your Android phone, do the following:
- Check which version of Android your phone is using. It needs to be Lollipop 5.0 or higher.
- If your device doesn’t have Google Pay pre-installed, then download Google Pay from the Google Play store.
- Open the Google Pay app and follow the on-screen setup prompts.
- When asked to add a card you can choose either one that’s already saved to your Google Account or to add a new one. You’ll need to confirm your card details and agree to the Google Payments terms and conditions as well as those of your card issuer. Your card issuer may also ask you to go through a verification process to confirm that it’s you.
- You may be asked to set up a screen lock on your Android device. Google Pay works with a variety of screen locks including PIN, pattern, and fingerprint. It won’t work with face recognition or some other screen locks.
- You’ll be prompted to turn on Near Field Communication (NFC) as this lets your phone use contactless features for payments, keys and IDs.
- If you have another contactless payment app on your phone, you’ll need to use Settings to make Google Pay the default payment app.
For further help with setting up Google Pay refer to the Google support page.
Setting up Samsung Pay on your Samsung phone
Similar to the procedure with Apple Pay, before you can use Samsung Pay you’ll need three things:
- A compatible Samsung phone or smart watch.
- A supported credit, debit, or gift card from a participating bank or card issuer.
- A Samsung account.
To set up Samsung Pay do the following:
- Open Samsung Pay and hit Get Started.
- Enter a new PIN for Samsung Pay, and then enter it again to confirm.
- If you’re a first-time user, you’ll be prompted to add payment cards to your digital wallet.
- Follow the onscreen prompts and register your card. You’ll need to agree to the card's terms and conditions. You can add up to 10 payment cards and an unlimited number of gift cards to your Samsung Pay account.
If you’ve got a Samsung smart watch, you’ll also be able to add Samsung Pay by following the instructions on Samsung’s support page.
How to add tickets and other items to your digital wallet
Just like in a real wallet you can also store the following to some digital wallets:
- Train, bus and plane tickets.
- Boarding passes.
- Hotel reservations.
- Concert and cinema tickets.
- Gift cards.
- Loyalty rewards cards.
There are a number of different ways to add them to your wallet. For example, if you’ve purchased something online, you may be able to click or tap the ‘Add to Apple Wallet’ or ‘Save to Google Pay’ icon in your email, app or other notification. You might also be able to scan a bar or QR code if you’ve purchased something in-person.
What are the benefits of a digital wallet?
According to research from payment processor Worldpay, in 2020 just under a third of online purchases were made using digital wallets. And by 2024 that could rise even further, to two in every five payments and 13% of in-person payments. So, what are the benefits that convince so many people to go digital when it comes to their spending?
- Convenience – Whether shopping online, in store or via an app it’s an easy way to checkout without any fuss. You can even start leaving your actual wallet at home if you don't want to carry it around every time you leave home.
- Enhanced security – If you drop your physical wallet then your cards, cash and information can be easily stolen. Whereas if you lose your phone potential thieves will have a lot harder time getting access.
- Fast transfers and financial flexibility – Some digital wallets let you instantly transfer funds between linked accounts when needed. You might also be able to transfer funds between friends and family, making splitting the bill easier than ever before.
- Insurance protection – Some iPhone insurance policies will even cover your digital wallet in certain circumstances. If your gadget is accidentally lost or stolen, Gadget Cover will refund the cost of unauthorised transactions made using your digital wallet up to a maximum of £500.
- Improved organisation – Not having to carry so many cards or coupons around with you is a great way to stay organised. And you’ll no longer need to remember all those tricky passwords and PINs.
- Time saver – If you’re in store, simply pull out your phone, use touch or Face ID to confirm the payment and you’re done. When making payments online you won’t have to fill in your payment details every time you want to make a purchase.
- Reap the rewards - Many businesses, like supermarkets, coffee shops and restaurants, reward return customers who spend on a branded smartphone app. When these are integrated with your digital wallet then you’ll soon see the benefits building up.
- Great for international travel – Digital wallets are an easy way to spend when abroad. Although make sure you’ve iPhone insurance that will cover your phone while you’re away.
- Free to use – Most digital wallets are free to use. So, you could use multiple digital wallets at the same time without worrying about maintenance fees and other costs.
- No connection issues – Some wallets work even if you don’t have a Wi-FI signal.
What are the disadvantages of a digital wallet?
When it comes to new technology, it can’t all be plain sailing. There are some down-sides to digital wallets:
- Technology problems – If your phone is glitching or there’s a service outage then you might be left without a payment option when you need it most. It might be wise to always carry some kind of backup.
- Loss of device – Having great iPhone insurance is a good way to protect yourself against loss, damage or theft of your device. But you could be left without money until the situation is resolved with your bank. So, be security aware at all times.
- Battery power – The curse of many power-hungry modern smartphones is battery life. If you’re not paying attention and your mobile runs out of power then how will you use your digital wallet?
- Not everywhere accepts digital wallets – Some businesses still prefer cash or may only have an old-style card reader. In such circumstances your fancy phone might not be so useful.
- Too easy to spend – This might not necessarily be a problem for everyone but when spending is so easy and seamless, you might find budgeting more difficult.
- Transaction limits – As with any payment method, your ability to make large purchases is likely to be restricted.
Six things to look for in a digital wallet
Just like finding the right iPhone insurance, choosing the right digital wallet can often depend on your own particular circumstances. If you’ve got one of the latest iPhones, Apple Pay might be perfect for you. Whereas, if you’re an Android fan, then Google Pay may be a better fit. Although Samsung enthusiasts also have the option of choosing Samsung Pay.
Some of the essential digital wallet features you might want to look out for in 2022 include:
- Two-factor authentication
For such sensitive data, you’ll want this additional layer of protection. This security feature protects your money (and data) from hackers, even if they gain access to your phone.
- Biometric login
Using Touch or Face ID technology to protect the contents of your digital wallet.
- Ease of use
To stay on top of your money you’ll want something that makes it easy to monitor your spending and track your card data.
- Available across devices
You’ll want it to be available on your phone as well as your tablet, smart watch, and desktop devices.
If you like to track cashback and reward programs from your favourite brands then some digital wallets make this easy and stress-free.
If you start experiencing technical difficulties, having a Live Chat feature where you can get help could prove invaluable.
Are digital wallets secure?
Digital wallets use advanced authentication and data encryption to protect your personal information. On top of that, they’re held within your device behind all those useful security measures such as Touch ID and Face ID. Many wallets also have additional security protocols, like two-factor authentication and one-time PINs. So, they really are quite secure.
However, it’s still a good idea to stay vigilant by using these top tips for digital wallet security.
- Never share your digital wallet password or PIN with anyone.
- Make sure your password or PIN is hard to guess.
- Change them regularly, or immediately if you suspect someone might know it.
- Monitor your accounts for any suspicious activity. If you spot anything then contact your card issuer immediately.
- Make sure you’re able to disable your device if it gets lost or stolen. Putting your gadget into Lost Mode is useful. Use the Find My iPhone feature to remotely wipe your iPhone of all its data. A great way to stop it from falling into a criminal’s hands.
- When shopping online, make sure you’re only buying from legitimate websites.
- Think carefully before removing any security controls from your phone. Any weakness in the security of your device can expose you to needless additional risks.
There are many ways to keep your digital wallet and mobile phone safer. From keeping your phone locked and creating a secure password to using a VPN and installing antivirus software, we’ve got lots of helpful tips elsewhere on our site.
iPhone insurance from Gadget Cover
Whether you’re doing the weekly shop or purchasing the new iPhone 13 online, consider adding a digital wallet to your must-download list. If you’re looking for some flashy new gadgetry then contact the team at Gadget Cover. We’re dedicated to setting you up with an iPhone insurance policy to suit your device, requirements and budget.
When you’re protected by Gadget Cover, you don’t have to worry about accidental damage, liquid damage, theft, breakdown and unauthorised usage. For an extra charge, your iPhone can also be covered against loss, too.
What are you waiting for? Get a quick quote for iPhone insurance today.
Policy benefits, features and discounts offered may very between insurance schemes or cover selected and are subject to underwriting criteria. Information contained within this article is accurate at the time of publishing but may be subject to change.