Digital wallets, a.k.a. e-wallets, have upended the consumer financial industry, offering improved speeds and convenience for transactions. In fact, recent research has shown that almost 50% of Americas have used a mobile wallet. However, are digital wallets safe? Taking the time to understand the potential risks and reading up on different strategies for digital wallet security, or secure online payments in general, is paramount in our connected age. This article will serve as a resource for you to learn all about e-wallets, and mobile wallet safety, as well as provide some essential tips for protecting digital wallets from online scams.
How Safe Are Digital Wallets?
So, how safe are digital wallets, actually? Well, digital wallets, or mobile wallets as they are sometimes referred to, keep your payment information digitally stored in a log to enable quick transactions. These can be done through most of today’s connected devices, including smartphones, tablets, computers, or wearables. Almost all mobile wallets have encryption features and some have tokenization to strengthen their security even more. However, they are not out of the woods when it comes to cyber attacks or hacking. Recognizing the possible vulnerabilities will be your first step in securing your digital wallet.
Common Threats to Digital Wallet Security
While there are several possibilities out there, there are some common threats to digital wallet security that everyone who uses the technology should be aware of.
- Phishing Scams: Scammers and cyber attackers will use advanced phishing techniques to trick users into sharing sensitive information, like their social security numbers or home addresses. These scammers usually go the distance, creating fake emails or SMS messages, or mimicking real businesses or people.
- Public Wi-Fi Risks: Accessing a mobile wallet or digital wallet while on an unsecured public Wi-Fi network can increase the likelihood of your data being stolen or tracked by hackers.
- Loss or Theft of Your Device: If your phone, wearable, or any other device that has access to your digital wallet is lost or stolen, unauthorized individuals could get into your account and access your financial information.
- Malware Attacks: Malware can be used to target your digital wallet, which could put the security of your stored payment data at risk.
Essential Tips for Protecting Digital Wallets
While there are many steps that could be taken to carry out secure online payments, the following is a list of essential tips for protecting digital wallets:
- Use Two-Factor Authentication (2FA): Adding a second layer of verification, such as 2FA via a one-time code sent to your phone, enhances security and makes it harder for unauthorized users to access your wallet.
- Always Make Strong and Unique Passwords: By creating complex and hack-proof passwords, you can enhance your digital wallet security. Try to avoid using this password in other places and consider using an encrypted Password Manager, such as the one offered by ReasonLabs through Online Security.
- Update Your Software: Always remember to update your digital wallet and your device’s operating system. System operators will often send out security patches to ensure your software is able to ward off any known threats.
- Avoid Public Wi-Fi: Think twice about banking online or sending P2P payments when you are not on a secure or private network. If you have no choice but to use a publicly available Wi-Fi network, consider using RAV VPN to encrypt your data.
These four tips may seem simple but they can be quite effective. Between a VPN, Password Manager, and practicing good data hygiene, you can make protecting digital wallets a breeze.
Mobile Wallet Safety: Best Practices
There are some best practices for mobile wallet safety that can help you gain peace of mind. We’ve mentioned certain products you can use, but this list will dive more into practices you can undertake to process secure online payments with your friends, and family, or when shopping online.
- Keep Track of Your Transactions: It might be tedious, but regularly reviewing your transaction history for any suspicious activities is a crucial step in digital wallet safety. Be sure to report anything you may find as soon as you can so your financial provider can help you take action.
- Authenticate With Biometrics: Whenever it’s possible, use biometric features such as fingerprint reading or Face ID. This brings added security that is very difficult for scammers to break through.
- Be Careful What You Download: Only download digital wallet apps from trusted sources, like the Google Play Store or iOS App Store.
- Use Your Device’s Security: Activate any and all security features your device has. These could be PIN numbers or lock patterns to help stop hackers from gaining unauthorized access to your device.
Secure Online Payments: Advanced Measures
Recent research from McKinsey & Company showed that more than 9 in 10 Americans had used some form of digital payment last year. Everything and everyone is going digital, so learning some advanced measures to help facilitate secure online payments is a must.
- Use Tokenization: Tokenization replaces sensitive payment information with unique tokens during transactions, reducing the risk of exposure in the event of a breach.
- Set Up Notifications: Setting up real-time alerts for transactions made through your digital wallet will help you quickly detect unauthorized activities and potential fraud.
- Insurance: Some digital wallets do offer fraud protection or specific insurance against unauthorized transactions. You should check with your financial provider for any available options to enroll with.
The Future of Digital Wallet Security
As our society creeps more and more online, digital wallets will only further integrate with more robust security features. Emerging technologies such as AI or the blockchain also provide some promising potential in the category of mobile wallet safety. That being said, user awareness and taking proactive steps to remain ahead of the cyber bad guys is critical to protecting digital wallets.
E-wallets are a convenient and otherewsie secure option for managing your finances. However, understanding the potential risks and implementing essential safety measures are the key to secure online payments. By following these digital wallet security tips, you can protect your financial information and enjoy the benefits of modern payment technology with peace of mind. Learn more about how ReasonLabs can help safeguard your digital wallet and enhance your overall cybersecurity here.
