How safe are eWallets? How to Protect Your eWallet
An eWallet, also referred to as a digital wallet, is the next level of convenience for consumers seeking easier and quicker payment options. eWallets have actually been in use for many years, especially in Europe where digital wallets are common. In the United States, eWallet popularity increased exponentially during the COVID-19 pandemic, when consumers wanted to make purchases without physical contact with cards and payment terminals.
But just as eWallets offer convenience, they also offer another opportunity for savvy hackers and cybercriminals to attempt to steal your financial data. So the question is, are eWallets safe to use, or are they just not worth the risk? The answer depends on how you choose to use and protect your own eWallet.
There are a number of things you can do to improve the safety and security of your eWallet, from common sense steps to utilizing online security software. Consider the following benefits of using an eWallet, followed by recommended steps for protecting it, and you’ll be able to make an informed decision.
What are eWallets? What are the benefits?
Think of an eWallet as an electronic version of a physical wallet. Instead of carrying around a wallet stuffed with credit and debit cards, you instead store your eWallet on your smartphone. The eWallet, like a physical wallet, is capable of storing a number of different debit or credit cards.
When you're ready to make a purchase, you simply wave your phone over the payment terminal, and the purchase is made. There is no need for handing a clerk your card or inserting a card into a terminal. The payment is quicker, contactless, and more convenient. If you choose to store more than one card in your eWallet, you can select one as the primary, or easily switch to another.
Aside from enabling quick and convenient payments, another benefit of using an eWallet allows you to store the information of several cards. This eliminates the need to carry around many different cards, such as store cards and loyalty cards. Some eWallet systems even let you store coupons.
eWallets also offer a measure of security — there is no need to carry around cash, and you don’t need to carry a wallet that could get lost or stolen. Even if you lose your phone, you’ll still be able to access your eWallet by signing into it on a new device. And, when making a purchase, you're required to provide some form of authorization before the purchase can be completed, such as a PIN or a biometric scan of your fingerprint. This helps prevent unauthorized purchases.
Because eWallets have increased so much in popularity, many retailers are now offering the option for consumers to pay in that manner. If there are still some businesses that have not yet upgraded to the new technology, chances are they will in the near future.
Common threats associated with eWallets
Malicious actors have noticed the rise in popularity of digital wallets, which means an increasing number of targets for them. The threats against eWallets are growing, and consumers need to be aware of the risks of using digital wallets and how to improve their eWallet’s security.
The largest threat is in the transmission of data across mobile networks that may be lacking in security. If proper security is not in place, hackers can hijack the payment information being transmitted. However, most eWallets utilize some form of encryption, so this threat is often minimal. Please avoid using Public Wi-Fi to not expose your data.
The biggest threat might actually be the loss or theft of your phone. If you haven’t locked your phone or your digital wallet, then a thief can easily access the information and make a number of purchases or even withdraw money from your bank account before you have time to act.
How to protect your eWallet and avoid these issues
Lock your phone
As mentioned above, the biggest risk in using eWallets is simply not providing protection for your phone’s data. Lock your phone with the security options it offers, and do the same for your eWallet and other important apps that contain private data. This way, a thief won’t be able to access your phone or your eWallet.
Monitor credit card and bank account activity
Always monitor your financial activity and know about your charges. If you see a suspicious charge, you need to contact your bank immediately and lock your financial accounts.
Install security apps
If you carry around sensitive financial information such as an eWallet, you’ll want to secure it as much as possible. Install security apps that further protect the data on your phone and also provide you with location services in case your phone gets lost or stolen. Having the option to remotely delete information on your phone if you can’t retrieve it is also useful.
eWallets are mostly safe, but they're not invulnerable. Be sure to employ additional security measures to reduce the risks and ensure your financial information doesn’t fall into the wrong hands.