Physical cash is on the way out, and so are your bank cards, thanks to digital wallets. Data from the Commonwealth Bank shows that the use of digital wallets and other contactless payments rose 90% between 2020 and 2021.
Digital wallets let you store your credit and debit card information securely. Then, instead of using physical cards to pay for something in a store, you can scan the wallet via your smartphone screen.
Digital wallets in Australia
You can download digital wallets from the App Store for Apple or the Play Store for Android.
- Apple Pay. If you use an Apple smartphone or tablet, you'll likely use Apple Pay as your digital wallet. You can also use it securely in the Safari browser when shopping online. You can add shopping loyalty and rewards or health insurance cards too.
- Samsung Pay. Samsung Pay is a digital wallet for Android users popular with people using Samsung phones. The wallet app works with major credit card providers and Australia's Big Four banks. You can also add in your loyalty cards and transit cards in NSW.
- Google Pay. Another popular wallet for Android users, Google Pay lets you pay in-store and online. You can add various non-bank cards as well. Google Pay has various security features via your phone as well.
- PayPal app. The PayPal app has several payment functions and also includes a wallet. You can add credit cards and shop online and take advantage of PayPal's buyer protection when shopping online.
There are other digital wallets for different purposes. Stocard for example is a digital wallet purely for loyalty cards.
Digital wallets for health care and concession cards
You can also use a digital wallet if you have a government health care or concession card. The wallet is part of the Express Plus Centrelink app.
You can add the following cards:
- Commonwealth Seniors Health Card
- Health Care Card
- Low Income Health Care Card
- Pensioner Concession Card
Digital wallet technical terms
- Near field communication (NFC). This is a set of features for smartphones and similar devices to establish a communication by bringing the 2 of them together. Applications include contactless transactions, data exchange or a form of complex communication.
- Radio frequency identification (RFID). This technology uses radio frequency to transfer data and information.
- Encryption. This encodes messages so only authorised people can understand it. An algorithm encrypts and hides the original message.
How does a digital wallet work?
A digital wallet works like an electronic version of your current wallet. It allows 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 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
- Earning points with all of your rewards programs
- Storing personal information
- Person-to-person payments
- Connect with appliances within the household
What about cryptocurrency wallets?
Cryptocurrency wallets are different from the digital wallets we've covered in this article. Cryptocurrency wallets are apps or software solutions that allow you to save and transfer your cryptocurrency. For a detailed explanation of what they are and how they work, check out our guide to cryptocurrency wallets.