Digital_Wallet2

Compare Digital Wallets

Information verified correct on June 29th, 2016

Managing your credit card, debit card, cash, loyalty cards, medicare card, business cards, receipts, insurance cards, IDs, train tickets and event tickets could be easier with a Digital Wallet.

When shopping at Myer Karen use to fumble with her wallet to find her MyerOne card. After the customer service assistant scanned it for her Karen then had to put her MyerOne card back in her wallet and dig again into her wallet trying to find cash to pay for her shopping.

Few years down the track and now Karen does her shopping online on the Myer website and pays for her shopping using PayPal. She can earn MyerOne points and pay for her shopping all in one go with one username and password, get her items delivered to her doorstep and doesn’t need to search through her wallet in the process.

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NAB's Digital Wallet

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    Karen’s shopping experience is one that is growing with more and more people now adapting to Digital Wallets for its convenience and security. Described as the future of payments, tech experts predict that Digital Wallets will soon be used as cash, coupons, comparison shopping, tickets and passes.

    What is a Digital Wallet?

    A Digital Wallet isn’t only a way to pay with a device, it could include taking the functions of your actual wallet with all of its contents and behaviours and integrating it into a digital device. This digital device could be something like your mobile phone or computer, with apps and in-built functionalities to help you with your everyday transactions. It lets you make electronic payments with your credit card or digital cash and hides the actual credit card information that is used to make the payment. By authenticating your transaction with encryption, the payment process is secure.

    Different examples of digital wallets

    What are the types of Digital Wallets?

    In this new space many tech companies are developing more and more Digital Wallets. Here are the ones dominating the Australian market so far.

    • PayPal - PayPal is the middleman for online payments for many online retailers, including Ebay. It gives the ability for you to make quick, simple and secure purchases with your existing PayPal account which you link to your transaction account or credit card. You can also earn reward points if you link the appropriate credit card with your PayPal account. Through a partnership with Bling Nation, PayPal is now using Near Field Communication (NFC) - enabled stickers to allow contactless payments from an enabled mobile phone.
    • Google Wallet - With the Google Wallet, you can buy online with your phone or computer at thousands of online stores. You can also buy in-store with the mobile app by tapping your phone to pay and redeem offers by using NFC (currently only available in the US). Google Wallet will let you manage your account and payment information and view your transaction history.
    • MasterCard PayPass Wallet - PayPass lets you make your everyday purchases by tapping your enabled device. It is fast and safe with zero liability which means that if you can prove that the transaction is fraudulent then you won’t be charged. It is accepted globally at many merchants, with a PayPass locator app available to download.
    • V.me by Visa - Like PayPal, V.me by Visa makes online payments easy when you shop online whether you’re using a computer, tablet or mobile phone. You can pay on any website where V.me is accepted without re-entering your credit card information again and again. Shop online securely without needing to share your financial information and link it with any major credit card or debit card.
    • Lemon Wallet. This handy app lets you store digital copies of your card so you always have your details on hand if your wallet is stolen or lost. You can also choose to leave your wallet at home if you prefer to travel light. All your data is safely stored and encrypted, with a PIN needed to access your cards and if you ever lose your phone, you can unlink your Lemon Wallet at home on your computer.
    • CommBank Kaching. The first of its kind in Australia, CommBank has created an app to let you pay anyone at anytime and anywhere. You can also pay your friends using your mobile, email or Facebook contacts and make contactless payments if the facilities allow you to. Contactless payments are also available with an enabled device.
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    • Near Field Communication (NFC). This is a set of features for smartphones and similar devices to establish a communication by bringing two of them together. Applications include contactless transactions, data exchange or a form of complex communication.
    • Bling Nation. Bling Nation is a service that helps businesses with social rewards for their customers. It is a mobile platform that allows contactless payments and social media connectivity to allow a richer customer experience online.
    • Radio-Frequency Identification (RFID). This technology is the use of radio-frequency to transfer data and information.
    • Encryption. This is way of encoding messages so that no one but only authorised people can understand it. It is encrypted using an algorithm which is used to hide the original message.

    How does a digital wallet work?

    Essentially a Digital Wallet works like an electronic version of your current wallet. It will allow you to make electronic payments with your digital device and hides the actual financial information. It authenticates your purchases through encryption and digital certificates to secure the payment processes from the consumer to the merchant. Most payments will use NFC, a technology that allows radio frequencies to communicate with each other. In the future, you can expect the following features to be available with your Digital Wallet;

    • Online shopping your from your device
    • Conducting comparison between items
    • Paying your bills
    • Earning points with all of your reward programs
    • Storing personal information
    • Person to person payments
    • Connect with appliances within the household

    Will smartphones eventually replace your everyday wallet?


    How do I compare digital wallets?

    Digital Wallets should be a personalised portal for you, so you may want to consider the following features you can expect from your Digital Wallet.

    • Security. Ensure that your Digital Wallet has a number of security measures in place such as encryption for every transaction, zero liability protection or some insurance for your purchases. Safeguards should also be in place to only bill you once if you tap twice by mistake. Consider setting up a username, password and PIN.
    • Payment method. Your Digital Wallet should utilise NFC for easy payments that are quick and convenient. You may also be able to pay your friends and family easily by bumping your devices together or electronically transferring funds. The Digital Wallet should be able to make bill payments on behalf of the user and schedule any bills payments when their due.
    • Online shopping. If you regularly buy online, it may be a good idea to use a Digital Wallet that is accepted at your favourite online retailers. You can avoid entering your credit card details every time you buy on the Internet and instead just enter a username and password. Check the merchant or partners page of the Digital Wallet to find out what they are.
    • Rewards. You may be able to link your rewards program with your Digital Wallet, so it may be able to give you real time reporting of the number of points you’ve accrued over loyalty programs. If you are a member of multiple rewards programs, remember to link all your cards to you Digital Wallet.
    • Organiser. Your Digital Wallet could store your calendar, contacts, tasks, lists and personal information, allowing you to access them at anytime. This makes it easier to update and retrieve the information you need when you want to , as well as easily sync your information to all your devices.
    • Technology. Contactless payments are the new standard for Digital Wallets and facilitate things like PayPass or PayWave. It uses Radio-Frequency Identification (RFID) tags to add a security layer that lets secure transactions through an enabled device. New Digital Wallets could incorporate things like computer chips and Point of Sale (POS) device that provide a better and smarter shopping experience for you.
    • Financial institution. Many banks and other financial institutions are integral to the Digital Wallet movements as they facilitate your payment. Your financial institution may already have an app available for you, which will make your digital payments easier as they already have your account information.

    What are the pros and cons of digital wallets?

    Pros

    • Smarter than your regular wallet. Digital Wallets can provide a better experience for you, as well as help you organise your finances. You can also keep coupons without bulking up your wallet.
    • Easily manageable. Manage both your notes, coins, forms of ID and any other cards by having it all in one place. It’s also easier to evocate all your lost items if you ever lose your wallet and you can reduce the chance of theft as you need to only worry about one item.
    • No fees. Electronic payments means that you can eliminate the need to go into a branch to do your banking. This also means that you can save on fees such as service charges, overdraft fees and pay minimum prepaid card fees.

    Cons

    • New technology. In the present, digital technologies are still misunderstood and haven’t reached a critical mass among consumers. This means that not every merchant will have contactless payment methods, which means that you cannot use your Digital Wallet everywhere you go.

    What are some things to avoid with digital wallets?

    • Forgetting about security. Always protect your information with a password or PIN just in case your Digital Wallet is lost or stolen. It’s important that you can always unlink your personal information from your Digital Wallet so no one except for you has access to it.
    • Forgetting about privacy. To avoid things like identity theft, it’s important to always be wary of the site you’re entering your personal information into. If you’re on a webpage, always look for the padlock symbol where you enter your web addresses to confirm that the web page is secure.

    Q&A

    You may want to consider apps like Lemon Wallet, PayPal and CommBank Kaching.

    You may want to consider apps like Isis, Google Wallet, CommBank Kaching, PayPal and Lemon Wallet.

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    Shirley Liu

    Shirley is finder.com.au's publisher for banking and investments. She is currently studying a Masters in Commerce (Finance) and is the author of hundreds of articles. She is passionate about helping Aussies make an informed decision, save money and find the best deal for their needs.

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    2 Responses to Compare Digital Wallets

    1. Default Gravatar
      John | December 3, 2014

      I have $7000 in credit on my credit card, which has a limit of $14,000. I would like to transfer this into an online e-wallet or some other account like a visa debit card. Is there anything on the market that you can suggest please? Thanks John

      • Staff
        Shirley | December 3, 2014

        Hi John,

        Thanks for your question.

        Please note that we don’t recommend specific products, services or providers. If you’d like, you can compare a range of debit cards here.

        If you decide to transfer your credit into this account, cash advance fees and interest may apply – so it’s best that you check your with your credit card provider beforehand.

        You’ll find that most banks nowadays have mobile apps available where you can check your balance. You can then use your linked debit card to make purchases through PayWave or PayPass. CommBank also provides a PayTag that you can attach to your eligible handset to make purchases.

        All the best,
        Shirley

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