A digital wallet is a piece of software that helps users move money using the Internet. Modern digital wallets utilize layers of encryption in order to ensure every transaction is private. This process is called “tokenization”, and it is used to make data anonymous and create a disposable session where the transaction can take place.
All that is useful, but it doesn’t help us understand how to shop for a great digital wallet. What qualities should you look for when you’re deciding where to store your money online? Here are some thoughts on what makes a quality digital wallet.
Stanford has some helpful ideas on what basics you should be looking for as a consumer. The best digital wallets are extensible, meaning they can handle any of the payment methods you may choose to use at a given moment. Vendors also shouldn’t be able to initiate transactions without your explicit say-so, thus making security extremely important.
Low fees are another great quality to look for, and those are achieved by re-using the same technology. You’ll never get a behind-the-scenes peak at this portion, so shop around for the lowest fees you can find.
And finally, Stanford concludes that digital wallets should be able to run on any device. You shouldn’t need your PC to complete a transaction, especially since smartphone adoption rates are rising.
Other qualities to look for include discounts and special offers. More digital wallets are working directly with retailers to make sure they offer personalized discounts to customers using these payment methods.