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Advantages & Disadvantages of Digital Wallets

5/17/2023

 

Advantages and Disadvantages of Digital Wallets

Digital wallets offer consumers a convenient, efficient and secure method for virtual payments, tickets, gift cards and more. While it may not be time to ditch your physical wallet just yet, we will likely continue to see an increase in adoption by U.S. consumers and merchants as consumers become more comfortable with contactless and digital financial services. There are several potential pros and cons of using a digital wallet.

Some potential advantages to consider include:

  • Virtual versions of your plastic cards can be conveniently stored in the digital wallet which frees up pocket space and provides simple access to your funds.
  • Contactless payment options result in quicker transactions.
  • Digital payments have the added protection of data encryption and tokenization, making them safer in many ways than traditional debit or credit card transactions.

Some potential disadvantages to consider include:

  • There could be limits on where you can use digital payments as not every retailer may be setup to accept them.
  • You must know how to set your wallet and use it.
  • Since digital wallets depend on your devices, there could be risk and inconvenience associated with a lost, stolen or broken phone or device.

View all of our 2023 - A Year of Financial Wellbeing Blog Posts.



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