Digital wallets, secure software that enables consumers to transform their smartphones or watches into mobile funds-transfer devices, are moving deeper into the electronic payments mainstream.
The term “digital wallets” is a catchall for services like Apple Pay, Samsung Pay, Google Pay, Paypal, Venmo, Zelle and more. While unlikely to completely replace cash anytime soon, according to a survey by Forbes Advisor, 53% of Americans who participated claimed that they use digital wallets more often than old-fashioned payment methods, such as cash or physical debit or credit cards.
Digital wallets go back as far as 1997, when Coca-Cola introduced payments for soft drinks via text message. That convenience served as the foundation that led to the modern digital wallet we know today. Worldwide, there were 3.4 billion digital wallet users as of 2022, and this number is projected to reach 5.2 billion wallets by 2026.
Becoming more than digital payments tools
Digital payment tools make it easy to deposit or transfer funds between your First Bank Texas accounts, to pay bills, shop in-store or online, and to dine in or out. Digital wallets are even showing their potential as more than just facilitating the electronic transfer of payments between consumer and vendor. Today, you can use your digital wallets as a “virtual ID” to store and access information from your driver’s license, healthcare records, credit and debit cards, and even event tickets.
What are the advantages of using digital wallets?
The number one reason digital wallets are booming is understandably due to their convenience. With consumers doing more banking, shopping and paying bills online – a trend that Covid-19 hastened – digital wallets augmented the traditional payment node of cash registers and point-of-sale terminals.
Information on transactions made with digital wallets is stored electronically, making it easy for users to meticulously track their spending. Wallet issuers and their marketing partners often encourage frequent wallet users with discounts on products and services and other promotions. Also, the contactless nature of digital wallets reassures users with concerns about the spread of germs from contaminated hands and surfaces.
Setting up your digital wallet with First Bank Texas is also quick and convenient. As long as you have a First Bank Texas checking account and debit card, you have everything you need. We have multiple options between our First Checking, First Reward Checking and First Patriot Checking accounts to better accommodate our customers spending needs.
What are the limitations of digital wallets?
Though the appeal of digital wallets has risen, they still aren’t fully embraced. Not all retailers and service providers are equipped to accept digital currency, mainly due to the cost of acquiring and supporting the specialized terminals and scanners needed to process payments. Also, some cashless payment apps impose fees on users for each transaction – an expense that can quickly add up for frequent users.
How secure are digital wallets?
Digital wallets boast multiple layers of security. For one, digital-wallet providers rely on digital “tokens” to track and protect their users’ identities. More levels of security kick in, including the software application that powers it. Lastly, the firewall protection from the retailer, the credit card company, and the financial institution issuing the digital wallet are also at work here. Considering the layers of protection at work, you can rest assured knowing your financial information is safe so you can spend stress-free.
Additionally, funds in certain digital wallet accounts, like those from Google Pay, Cash App and Zelle, are federally insured through their banking partners by the Federal Deposit Insurance Corp. Others, like Venmo, have no such coverage on funds held in their digital wallet accounts.
Ready to start spending with your digital wallet?
Contact First Bank Texas today about getting started with digital wallet, as well as any of our other financial products and services.
