4 Reasons to Switch to a Digital Wallet

Andrew Kaplan, Executive Vice President, Director of Private Banking - West Region
March 21, 2022

It’s estimated more than half of all consumers have switched over to paying for goods and services with a digital wallet (an electronic version of the leather wallet they carried for years). But you may be with the other half not quite sold on the idea. You’re still in the camp of being a bit more cautious. The technology seems confusing, and you worry about the safety of your information.

Digital Wallet
Few would argue health safety issues during the pandemic played a huge role in the skyrocketing popularity of digital wallets. The ability to make payments for purchases in stores, restaurants, and other businesses – paying in a way that reduced the need for physical contact and touching contaminated surfaces – just made good sense the past two years. The simple act of holding a mobile phone over a card reader instead of handling cash, writing a check, or touching a keypad to enter a PIN code for a debit or credit card has given many consumers and merchants peace of mind they’re not willing to give up. And there are other good reasons why paying with digital wallets is here to stay.

Digital Wallets Have Been Around For Awhile

Here are four reasons why digital wallets most likely will gain even more popularity as we hopefully leave the pandemic behind us and our lives move into a new phase of normalcy.

Setting up a digital wallet is easy
Probably the most common digital wallets include Apple Pay®, Google Pay™, Samsung Pay, Garmin Pay™, and Fitbit Pay™. Keep in mind, however, access to these major digital wallets is dependent on the brand of your mobile phone (or other electronic devices). For example, you can’t use a digital wallet set up on Apple Pay if you have an Android phone.

Digital wallets all work much the same. You can sign up easily on a mobile phone app by providing a username, email address, and password. Once you’ve set up your digital wallet, you can access it from your devices (e.g., mobile phone, tablet, laptop, etc.). Likely your mobile device already has a preloaded digital wallet. If so, follow the instructions for your specific device and app to get started. Once you’ve completed the set up, you can provide the required information to connect your cards and banking accounts to it.

Making ‘contactless payments’ avoids unnecessary contamination
If you decide to pay with a digital wallet at a business, restaurant, or retail store, you’re making a “contactless payment.” There’s no need to swipe a card or insert information at the register. Usually, you open your device’s digital wallet and hold it over the payment reader to pay. This method of payment is possible because of technology called near-field communication (NFC) that allows devices to exchange information without touching if they’re placed closed to each other.

Apple Pay and Google Pay use this technology. However, not all merchants have compatible card readers at checkout
locations yet – it’s a good idea to have a backup payment method handy just in case.

Protecting your information is a top priority
With card compromises so prevalent these days, it’s always wise to protect the security and safety of your personal and financial information. Fortunately, digital wallets have features that provide high levels of protection. Digital wallets rely on security measures such as tokenization, single-usage PINs and two-factor authentication, in addition to encryption technology that scrambles your passwords and financial information.

Additionally, here are three steps you can take to help keep your digital wallet safe and secure:
● Enable all the security features on your device.
● Use a strong password that is at least 12 characters/numbers long.
● Avoid responding to unsolicited emails or texts that ask you to send money through a digital wallet.

If your information is hacked or compromised, change your password and report it to the app immediately. Hackers
and thieves can access confidential information housed in your digital wallet if you lose your smartphone or any
personal device that connects to it. If you have questions about the use and safety of digital wallets, visit www.
idtheftcenter.org for more information.

‘Wearing’ your wallet is stylish and convenient
Nowadays digital wallets often are included on tech wearables – watches, fitness bands, rings, and more. Similar to the digital wallets found on smartphones, “wearable” wallets offer the same convenience, safety, and security. Just think how convenient it could be to head to your favorite coffee or smoothie shop after your morning run or on your way to work and pay for your drink with a wave of your hand!

We can help
Having a better understanding of new payment technologies can help you determine whether a digital wallet is right for you. Likely your financial accounts and cards are compatible with digital wallets, but check with your financial institutions and card providers to make sure. Commerce Trust Company is here to answer your questions regarding set up, safety, and security. Contact us today for more information.

The opinions and other information in the commentary are provided as of March 22, 2022. This summary is intended to provide general information only, and may be of value to the reader and audience.
This material is not a recommendation of any particular investment or insurance strategy, is not based on any particular financial situation or need, and is not intended to replace the advice of a qualified tax advisor or investment professional. While Commerce may provide information or express opinions from time to time, such information or opinions are subject to change, are not offered as professional tax, insurance or legal advice, and may not be relied on as such.
Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.
Commerce Trust Company is a division of Commerce Bank.

 

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ABOUT THE AUTHOR

andrew kaplan commerce trust company
Andrew Kaplan Executive Vice President, Director of Private Banking - West Region Commerce Trust Company 
Andrew is executive vice president and director of private banking for the West Region of Commerce Trust Company. In his role, his responsibilities include overseeing our West Region team of private bankers and client associates as well as approving and structuring credit facilities for our clients, establishing sales tactics and strategies within our footprint, and working with other departments to ensure a coordinated approach to our clients’ banking and wealth management needs.

Andrew began his career with Commerce Bank in 1984 and, during his tenure, has worked in the commercial and trust lines of business as well as the Capital Markets Group.

Andrew has a bachelor of science degree in business administration and finance from the University of Missouri and a graduate banking degree from Southwestern Graduate School of Banking at Southern Methodist University.

Additionally, he is heavily involved in the community and has previously served as board chairman of The Learning Exchange. Currently, he is a chairperson member of the Jewish Heritage Foundation and vice chairperson of the Menorah Heritage Foundation. Andrew also serves as a board member for the Kansas City Repertory Theatre. Andrew enjoys hiking and attempting to section hike the entire Appalachian Trail. His daughter currently lives in Zambia and is working for the Peace Corps.