How Safe is Your Digital Wallet?

How Safe is Your Digital Wallet

Sending money online or through a digital wallet is often faster, easier, and more convenient than other conventional payment types. However, this newer technology relies on mobile phone technology and online security. Given the rise of digital wallet use in the past decade, some wonder if it is actually safe or if putting your financial information online in a digital wallet comes with an increased risk.

Naturally, digital wallets are designed with security measures in place. Using one can make transactions easier, and it can actually keep your money safer than traditional wallets.  

What Is A Digital Wallet?

A digital wallet is a software-based online payment tool that usually exists on a web browser or phone app and facilitates payments online. A digital wallet might store an online debit card, an online credit card, access to bank payments, the use of cryptocurrencies or crypto wallets, or the payment of digital cash. 

Using a digital wallet is pretty simple. They require some setup, where the user must log in to the desired account and approve the credentials. However, once they are set up, the user can use the digital wallet regularly to pay at point-of-sale systems in businesses, send money electronically, accept money electronically, connect an Automated Clearing House (ACH) payment, send money internationally, and much more. 

How Does a Digital Wallet Work

Many popular digital wallets, like the Google Pay and Apple Pay apps, have mobile apps on iOS and Android devices. Once set up, these apps can be used to make purchases through tap technology or by sending money online. 

Digital wallets must connect with certain verified payees, like at POS systems or members online. Not every payee has the capabilities of accepting electronic money transfers, so you must ensure that the app logo is on the payment system that you choose. 

If it is, then you open your digital wallet app, choose the payment method that you prefer, and then tap the device on the POS system terminal. The payment should be approved, and a message will be sent to confirm the transaction. 

Digital Wallet App Security

Digital wallets are run on software, usually powered by APIs (Application Payment Interfaces). APIs are secure codes that send transaction data to a specific and verified site, ensuring your payment information is not publicly available online. 

Each transaction is protected by the app, credit card company, retail outlet, or bank, or credit union that issued the card. And the financial payment data is secured through the app security system itself (usually a login). 

Security may be compromised if your device is lost or stolen. If you used credentials to log in, know that at least your digital payment data is safe. No matter what, you should be able to provide your device ID number (your International Mobile Equipment Identifier [IMEI] or Mobile Equipment Identifier [MEID] number) to your phone carrier, who can then disable your smartphone and digital payment apps. This way, your sensitive information can be blocked by those who come across your phone. 

You’ll also want to report any theft to the police. 

In terms of regular security, there is a low chance of your app being hacked. Digital wallets are protected with layers of device security, including API private keys and tokenization. Therefore, the payment data in your app is heavily encoded. If a payee gets hacked, your debit card number and credit card number will be protected. 

How to Keep Your Digital Wallet Safe

While the app itself is secure, you want to practice data security and password protection best practices to prevent someone from gaining access to your app:

  • Make sure to lock your phone and protect it with a password
  • Your wallet should also be protected, and make sure that the password is different from your phone password
  • Be discreet when unlocking your device
  • Try to avoid using digital payment services over an unprotected WiFi environment. While it can’t always be avoided, make sure you aren’t loading your sensitive bank card information over the network
  • Install extra security apps on the devices where you use your digital wallet; this might include a smartphone or computer locator, the ability to wipe sensitive personal information from your device, and a device locker
  • Monitor your financial bank accounts; if you notice fraudulent behaviors, you can immediately report it
  • Write down the make, model, and serial number of your device, including the unique device identifier (IMEI and MEID) so that you can disconnect your phone when you need to. 

Keep Your Finances Secure

Digital wallets make payment simple, fast, and easy. They are also extremely secure. Remember to put your trust in a company that has security top of mind, like Sila. They use private third-party APIs to verify bank information, so none of the information is secured with Sila. This makes your financial data even more secure because the third party can ensure that the payment data is stored securely and in a credible location off-site. 

Sila’s digital wallet has incorporated crypto technology, which makes it even more secure. Crypto transactions are recorded on the blockchain, so you know that every transaction can be verified for secure transactions. Their technology also utilizes smart contract technology for reliable and secure transactions as well. 

Consider Sila to keep your finances secure, and consider their digital wallet API for convenience and reliability when you need a digital wallet.