Just about everyone seems to be using a digital wallet today. In fact, almost 9 out of 10 people in the U.S. use some form of digital wallet according to a2022 McKinsey’s consumer survey.
But is a digital wallet considered a bank account? While some similarities exist, there are also some key differences. Here’s everything you need to know about a digital wallet vs. a bank account:
What is a digital wallet?
A digital ormobile walletis a financial application you can use online or via mobile devices to store payment information in the cloud. Digital wallet apps work with online purchases, money transfers, gift cards, and document storage.
With a digital wallet, there’s no need to carry cash or bank cards. You can simply open your digital wallet on a cellphone and tap to purchase items in seconds.
A few examples of digital wallets include Apple Pay, Google Pay and PayPal.
So, is a digital wallet a bank account?
Not exactly. Both offer quick and convenient ways to pay for things, but some subtle differences exist.
Digital wallet apps are primarily used to store money and payment information, whereas banks allow you to manage more financial information across your accounts.
On the other hand, bank accounts and mobile banking apps allow you to do more with your money. You can often check account balances, pay bills, deposit checks,transfer money, and manage savings accounts.
Pros of using a digital wallet
Convenience
One of the biggest pros of using a digital wallet is that you can leave your cash and cards at home and still pay for things while you’re away from home — whether it’s gas, groceries, or restaurant meals.
Expense tracking
While you can do this with a bank as well, digital wallets can offer a fast way to track expenses. You can see what you’re spending in just a few taps in the app.
Data security
Digital wallets are encrypted to protect your financial information. You typically have to use a password or biometric authentication like a fingerprint to use a digital wallet. That means that even if your phone is stolen, your money is safe — unlike if someone steals your wallet.
Cons of using a digital wallet
Requires a mobile device
There are many reasons requiring a mobile device could be inconvenient, including if you lose your phone, forget to charge it, or don’t own one. The last thing you want while away from home is to rely on your phone to make payments when it’s low on battery.
Limited acceptance
Digital wallets are becoming increasingly popular as a payment method. Even still, not every merchant accepts them! If you visit a store that doesn’t accept contactless payments through a digital wallet and you’ve left your physical wallet at home, this could also cause a problem.
Merchants may not accept digital wallet purchases because it’s a bigger investment to get the right hardware and software to accept them. This adds to their operating costs, which may not be feasible for small businesses.
Limitations when using or sending money abroad
Some digital wallets are limited when it comes to handling multiple currencies or international transfers. In that case, you can use an international money transfer service like Ria Money Transfer!
Send money abroad with Ria Money Transfer
At Ria,we make international money transfers easyand cost-effective to send online, through our app, or in-person. Ria customers can send money directly to more than 480 million mobile wallet users across 39 countries. We also offerthe Ria eWallet in Malaysiafor a convenient way to manage and send money.
Join millions of people in using Ria Money Transfer with low fees and great exchange rates.Start sending money using our online currency calculator or app today!
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