6 ways to get the most out of a digital wallet

A digital wallet, or e-wallet, is an app or interface that allows secure and convenient transactions online or in-store. On a smartphone, it's typically used as a "mobile wallet."

Look for convenience features

One of the main digital wallet benefits is convenience. Digital wallets can store personal payment information and communicate with vendors’ bank accounts for smooth transactions online.

If a digital wallet is on a mobile device, it may be able to connect with in-store point-of-sale terminals for speedy and secure contactless phone payments.

Digital wallets may be able to store other useful information, including:

• Loyalty and gift cards
• Boarding passes and transit tickets
• Event tickets
• Membership cards
• Coupons
• Hotel reservations

Take advantage of rewards and cash back programs

Digital wallet providers may offer cash back reward programs that can integrate or be used in addition to other existing reward programs, such as store loyalty programs.

Consumers can also earn cash back and receive points on everyday purchases with participating merchants, allowing them to redeem points for discounts, gift cards, and travel miles.

Budget and track expenses

Some digital wallets offer built-in tools for managing money. Here are some financial management actions digital wallets may help users with:

• Monitor transactions. Because payments are typically in real time, digital wallets can give immediate information on transactions while categorizing them for easier budgeting.
• Track expenses. Some apps offer financial tools to helps consumers track expenses, offering key insights into financial habits.
• Setting limits. A digital wallet's spending limit functionality can help to put a cap on specific spending categories to further control expenses.

Utilize built-in security methods

For contactless payment safety, digital wallets may feature built-in security measures that include:

• Biometric authentication processes like fingerprint and facial recognition.
• "Tokenizing" personal information in the payment chain, so personal card details are scrambled and protected from merchants during transactions.
• Instantaneous transactions that are monitored for fraud and suspicious activity in real time.

Use digital wallets for international travel

Digital wallets may be helpful when traveling abroad, as some are able to securely store foreign currency and make contactless payments in supported countries. With an international digital wallet, consumers may be able to avoid currency exchange fees.

It’s also common for an international e-wallet to offer a real-time or "mid-market" exchange rate for international transactions.

These benefits may not be available with all digital wallets, so be sure to review any transaction costs or exchange fees when making a payment.

Utilize peer-to-peer payments

It’s possible to send money and collect money from friends and family via a digital wallet. Through peer-to-peer payments, digital wallets can transfer funds quickly between linked accounts using phone numbers or email addresses. This can be especially helpful for splitting bills, paying rent, and other shared costs.

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