The Digital Wallet

 In digital, emerging tech

The Digital Wallet Influence

Not again. It’s all I could think on a recent trip to Disney World. I had just paid for some unbelievable American food at this place called Wendy’s. Somehow, I misplaced my credit card. Sound the alarms. Cue the identity theft, fraud and abuse worries. Funny enough this always happens to me on vacation. However, with the digital wallet, events like this could become a thing of the past. The question is, is the technology mature enough to entrust all our critical information? The age of the digital wallet is upon us.

Most are familiar with what the digital wallet is on some level. However, there are many misconceptions about it. While still in its infancy stage, it’s important to understand the details behind the digital wallet. The technology has the potential to change how we conduct business. As such, society must be informed of the risks and benefits they are potentially receiving.

WTF is a Digital Wallet?

Remember that Seinfeld episode about Costanza’s wallet? He kept literally everything in it, and eventually it ballooned so big it gave him back problems from sitting on it.


In short, the digital wallet wants to replace the Costanza wallet. It could include insurance information, social security numbers and credit cards. Oh, and all those pesky reward programs you’re part of? It’ll keep track of that too. All behind a bulletproof security layer. Convenience, security, and portability: what could go wrong?

Right. But the truth of the matter is, the digital wallet has evolved in its short lifetime. It has become an answer to some of the more common transactions. For instance, tell me the last time you wrote a check to a friend. Don’t get me wrong, it still happens, but the digital wallet allows you to send money instantly (assuming they own a bank account). Like most things previously paper, digital is slowly transforming the medium of monetary transaction.

The Growing Use of the Digital Wallet

As mentioned above, the uses for the digital wallet are expanding at a rapid pace. Paying friends or sending money is just the tip of the iceberg. Most digital wallets can extract money from ATMs. They also simplify your online presence. No more releasing credit card numbers for every merchant interaction. As long as they accept digital payment (most all do now), your digital wallet replaces the need to enter card information on their servers.

The flexibility is also uncanny. Out for a walk or run but no wallet or phone? No problem. Digital wallets like Google Pay can be linked to your smart watch or fitness tracker. And it goes without saying that once you sign up, you effectively can have the digital wallet anywhere you have a device, assuming you carry your fingerprint with you.

Oh yeah, and what about that security? It is actually becoming safer than carrying a hard wallet, believe it or not. I didn’t believe it at first either, but the technology they are using really is quite novel. Let’s take a look at this elephant in the room.

Digital Wallet and that Elephant in the Room

Digital Wallet: Elephant in the Room

As online transactions have increased, security and personal data protection have become paramount to all digital transactions. Sadly, you’ve heard of all the data breaches from Pandora, to Target, to even Equifax. The goal of companies such as Google and Apple is to leverage these mistakes to create a digital wallet so secure that you trust it with all your information. We will touch on each and how they ensure your safety and security but first an example.

As mentioned above, one of the features of the digital wallet is it doesn’t store your credit card information like a store would upon a transaction. We’ve all been there. Late night, one to many cups of coffee (or bourbon) and your staring blankly at your computer. You can’t believe your eyes. Can it be? A cat… in outer space… on a shower curtain? Yes my friends, you have indeed struck gold. This is it, the one purchase you’ve waited your whole life for. It’s on BillyBrixton.web, but luckily Billy accepts credit cards. Five days later, you staring at this marvel of art, while on the phone with your credit card company sifting through identify fraud paperwork. Don’t worry, the product below is from Amazon, so maybe a bit more secure than Mr. Brixton’s house of horrors.

The point is, digital wallets are being designed to avoid this exact situation. Because the leading apps have no tracibility to your credit card number, a transaction via the digital wallet with Billy Brixton would less likely end in identity fraud. Now take Billy Brixton and multiply that by the dozens upon hundreds of websites you’ve likely bought from in your lifetime. Your digital footprint is everywhere and with it your credit card number. The irony with our elephant in the room (e-wallet security) is that the digital wallet could indeed be a safer alternative in most purchase scenarios — maybe except for cash, but that has its own security concerns. Let’s look at some other features the leading apps are creating in digital wallets.

The Players

There are various companies in the digital wallet business but two of the big ones are worth mentioning here: Google and Apple. Each offers similar services but with different wrinkles. On a broad level, it seems to be an Android vs iOS battle, though there are multiple Android digital wallets outside of Google. For now, we will explore both to provide some options on what exists out there.

Google’s Digital Wallet

One of the biggest names in tech was one of the first to market with their digital wallet. Google Wallet (now, Google Pay) was created back in 2011 and utilized NFC to make purchases with your credit card information. It has evolved to much more than that with peer-to-peer payments and public transit services.

Digital Wallet: Google Pay is a major player

Google and security seem to be synonymous. They are implementing the latest and greatest in encryption technology and have your data backed up like no other in the event of disaster. They never store your card data and instead use randomized tokens to authorize your purchases. In this way, your data is no longer being disseminated to every website when a purchase is made. It helps protect both you and the merchant as they have little tracibility back to your card data. This shields you and them in the event of a data breach.

The rumors are also out there that Google is investigating the use of blockchain to further decentralize and protect your data. This could have significant impacts on security as this method, if done correctly, could potentially make it near impossible for hackers to breach. It would also ensure the integrity of your transactions digitally in the case fraud charges. Of course all this is conjecture at this point so stay tuned.

Apple’s Digital Wallet

Apple’s digital wallet, Apple Pay, was released in 2014, a bit later than Google Pay. It has many of the features you’d expect in a leading digital wallet: contactless payment, built in encrypted security, widely accepted etc.

Apple has a unique ecosystem. While some Android devices may be limited on Google Pay support, you can be sure that if it’s Apple, Apple Pay is supported. iPhones, iPads, Apple watch and Macs all support the service. It too uses NFC technology, so any wireless payment accepting point-of-service station can likely take Apple Pay.

Digital Wallet: Apple Pay is another big brand in the business

The security is similar to Google with its own wrinkles. Apple Pay utilizes a token system for each transaction. Thus, your data is protected because the physical charge number is masked for each transaction. Beyond the encryption, Apple Pay employs multiple techniques for identification. Features such as facial recognition, PIN numbers, fingerprints or passcodes can be used to confirm your identity. Two of these features must confirm each purchase. A little extra hassle to be sure, but certainly makes stealing near impossible.

Plus, the extra authentication helps protect you in the invent of device theft. With a plastic credit card, a thief can use it almost immediately online (or even brick-n-mortars these days, with signatures being ignored). With your device, they’d still need your face, thumb or passcodes to purchase. Obviously, quite challenging. Well done, Apple.

The Future of the Digital Wallet

These digital wallets are powerful devices. They should make future transactions a small, while keeping things organized. And whether or not you believe it, hopefully the information above has proven its security. Furthermore, with the ability to keep multiple cards and information on record, they really do have the potential to replace a traditional wallet.

So if you are a beginner and deciding which to choose, it may be easiest to start with your phone. Apple technology is a fully integrated suite of devices. So that might be a no brainier if you already own an iPhone. Slightly more complicated if you own an Android device as Google isn’t the only player. However, given the history of Google and their ability to secure information, they may be a natural starting point. As for fears around informational sharing for advertising, that may be a topic for another day. However, if you operate anywhere online with Google or Apple, suffice to say you’ve agreed to have your information shared in some capacity.

The digital wallet looks like a powerhouse for future market transactions. It’s already being accepted at major outfits such as McDonald’s and Target. So maybe it’s time to get with the times and dip a toe in the water. Trust has to begin somewhere, right?

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