How Digital Wallets Can Help You Spend Smarter

From online banking to mobile applications, it’s clear that convenience is king when it comes to managing money. At the forefront of digitization is the mobile wallet. These days, a mobile wallet is more than just a place to store your boarding pass or pay for that bag of chips—it can be a powerful tool to spend smarter. 

What is a digital wallet? 

Also known as an electronic wallet, a digital wallet is an application that runs on devices, such as a smartphone or smartwatch. If you have ever opened your phone and noticed a wallet app, Apple Pay, Cash App or Google Wallet on your home screen, these are all versions of a digital wallet. 

The digital wallet stores various payment methods in the application, so that you can make a purchase without needing to carry a physical card or cash. 

In addition to the Apple Pay, Cash App and Google Wallet, the digital wallet can also store: 

• Samsung Wallet 
• PayPal 
• Venmo 
• Gift cards 
• Membership cards 
• Plane tickets 
• Event tickets 
• Coupons 
• Loyalty cards 

Simply add your card to the wallet, and then instead of using a piece of plastic to pay for goods and services, tap your smartphone or watch to pay. For example, I walk my dog past a particular store every morning. Sometimes, we stop at that store, and I let her sniff the goodies in the aisles and buy her a treat. I never bring a credit/debit card with me on walks, but my Apple Watch comes in handy because I can still buy items by tapping the watch’s digital wallet on the point-of-sale terminal. The digital wallet makes all the difference for my happy dog! 

Simple and consolidated 

Digital wallets are more than just a way to pay for goods. They make it easier to simplify your finances.  

Listing expenses on a piece of paper or a spreadsheet can be both manual and time consuming. Digital wallets now automate this work by providing categories and offering insights. As soon as the purchase is made, you can see the transaction associated with that card in the wallet. No more visiting separate websites and downloading transactions to get a consolidated view of your expenses. Flip from card to card in the wallet app and you can immediately see your recent transactions all in one place. 

Purchases are also simplified, as you no longer have to remember a PIN. Enter your phone’s password or use your biometric data to activate the card for purchases. Then, just tap the screen and the purchase is done. 

Faster use and real-time tracking 

Gone are the days when you apply for a credit card, receive approval, and then wait for a piece of plastic in the mail to be able to use it. At many financial institutions, including EastRise, you can add your credit card to your digital wallet as soon as you are approved and put your credit to work immediately. 

There may be prerequisites to using the card digitally, such as downloading the financial organization’s app to your phone and having online banking access. However, those requirements may be completed even before your card arrives in the mail, which still allows faster use of your new card. 

Having immediate cash flow tracking is important because it allows you to make smarter financial decisions by analyzing past transaction trends and maintain financial stability to meet your obligations on time. Digital wallets will even allow you to decide if you would like to use your credit card reward points, or credit line, when making a purchase. 

Financial tracking is not just about seeing your transactions in real-time; it also includes setting realistic goals for your finances. Improved transparency of your income and expenses means that you can set realistic financial objectives. So, whether you are saving for a child’s college education, a dream vacation, or building an emergency fund—your transactions can function as a roadmap to achieving your goals. 

Can be a more inclusive, safer option 

It may seem scary to add a credit or debit card to an electronic device. However, when your card number is transmitted from your device to a point-of-sale terminal, a virtual number is used, rather than the number that is on your physical card. The physical card number is never transmitted outside of your digital wallet. 

Also, it may be a more secure method because you can’t lose a card that you don’t physically have! It is less likely to be misplaced. However, it is important to use a digital wallet from a provider that is vetted and has an established reputation. 

Digital wallets also provide access to those who reside in unbanked or underbanked communities. People can open an account at an online-only bank and then use a digital wallet. This helps to promote the use of financial services, thus creating more financial inclusion.  

There are several ways that digital wallets can help you spend smarter, aside from just making a quick payment. It is important to do your research and weigh how digital wallets fit into your unique financial situation. If you decide that it is a good fit, the real-time transaction tracking and consolidated view could help you achieve your financial goals.