Cyber Bytes: Protecting Your Digital or Mobile Wallet
The terms “digital wallets” and “mobile wallets” are often used interchangeably, but they aren’t exactly the same, even though both connect to bank accounts and credit cards.
Digital wallets are typically used for completing online transactions on mobile devices or computers. Digital wallet providers usually offer apps you can download to your phone, making the wallet suitable for mobile payments.
Mobile wallets are digital versions of your wallet stored on a mobile device, like a phone or smartwatch.
Items you can store in your wallet
In addition to credit cards, you can use your digital and mobile wallets to store things like:
- Event tickets
- Gift cards
- Airline tickets
- Loyalty cards
- Transit fare cards
- Digital keycards (like those used for hotel rooms)
- Vehicle keys
- Identification cards
- Driver’s licenses
A word on cryptocurrency
Different cryptocurrency exchange platforms have wallets to buy, sell, store and transact cryptocurrency.
Some cryptocurrency companies created have debit cards, allowing their account holders to convert cryptocurrencies to dollars at the current market value, making purchases more convenient. A few digital wallet companies include the option to add cryptocurrency debit cards to their wallets like you would other wallet items.
The technology behind mobile wallets
Near-field communication (NFC) is a technology that allows devices like phones and smartwatches to exchange bits of data with other devices. NFC also allows these devices to read NFC-equipped cards over relatively short distances. Holding your mobile device near the point-of-sale device allows your wallet to initiate and transfer encrypted data to complete a transaction.
NFC is a progressive evolution of the more basic radio-frequency identification (RFID) tech used in security cards and keychain fobs. In its earliest iterations, NFC was used to tap-share files like documents and photos.
Quick response (QR) codes are matrix bar codes that store information. You use your device’s camera and your wallet’s scanning system to process payment with a merchant.
Wallet security is baked in
Digital and mobile wallets are secure, potentially even more than physical wallets and cards. Digital wallets store virtual versions of credit card data that is encrypted and tokenized. This means none of your card details or account numbers are stored in the wallet on your device (the data lives in the cloud). Wallets use security layers like these to protect your information:
- Identity authentication when you create your wallet (to verify it’s you and not a threat actor)
- Personal identification numbers (PINs) and biometric scans (e.g., retina, voice, face or fingerprint)
- Artificial intelligence or machine learning monitoring (to identify and alert you to suspicious account activity)
- Payment encryption (to hide your payment information when processed in the app)
- Virtual account numbers (to mask your actual credit card and account numbers when tapping to pay for things outside the app)
- Cybersecurity alerts (to keep you informed about the latest scams and ways to thwart them)
- Mobile device protection (to find a lost device and lock or erase the data on it)
You can opt out of some security features, which might decrease access to specific wallet options like higher credit limits.
Cybersecurity and anti-theft apps for your devices
Your devices need protection, just like computers. Some cybersecurity companies sell protections for multiple devices. For the sake of your digital wallet and identity, it’s worth looking into.
If someone steals your device, there are ways to protect yourself. Post-theft apps can do a host of things, such as:
- Remotely control your device using text or a portal
- Track and lock your phone
- Wipe your phone’s data
- Alarm or scream for help until the correct password is entered
- Automatically lock your device if the SIM card is changed
- Automatically take a photo if someone enters the wrong passcode
- Automatically email you a photo and GPS location if someone enters an incorrect PIN too many times
With digital and mobile wallets rising in popularity, cybersecurity for devices has become a necessity. Stay current with device updates and take advantage of the security built into your devices and third-party options.
This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem. Please refer to your policy contract for any specific information or questions on applicability of coverage.
Please note coverage can not be bound or a claim reported without written acknowledgment from a OneGroup Representative.
Written content in blog post: Copyright © 2023 Applied Systems, Inc. All rights reserved.