Are mobile wallets safe?

Apr 20, 2021

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Since the age of the coronavirus, almost all cards now offer contactless payment capabilities. With just a simple tap on the card reader, it’s a win-win for you: your data is more secure, and you’ll encounter fewer touchpoints.

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What has also become increasingly popular is mobile wallets. You can load all of your credit and debit cards, as well as boarding passes, tickets, loyalty membership cards and more — all in one place. Whether you have an Apple or Android device, you can access your mobile wallet via your smartphone or smartwatch.

With the rise of mobile wallets, you may be skeptical if it’s a good idea to load all your cards on one app. In this guide, we go over everything you need to know about mobile wallets and whether they’re safe.

In This Post

How mobile wallets work

Nowadays, there’s many mobile wallets to choose from. Perhaps the best (and easiest) option is to use whichever mobile wallet that comes equipped with your smartphone — whether that be Apple Pay, Samsung Pay, Google Pay, etc.

No matter your preference, setting up your mobile wallet should follow a similar process. You’ll add the cardholder name and the 16-digit card number, along with the expiration date and CVV number. Your bank may ask you to verify your card information with a two-step authentication process. After that’s complete, you’re ready to begin using your mobile wallet.

I’ve loaded all of my credit and debit cards onto my Apple Wallet for easy access. Screengrab from Stella Shon/The Points Guy.

Once you’ve loaded all of your cards, you’ll be able to see them all lined up in your mobile wallet. Beyond the type of card and the last four digits of the card number, you won’t be able to see the full 16-digits or any sensitive information. This keeps your information secure in case someone gets access to your phone.

Related: Best contactless credit cards: Tap to pay

You’ll select one card as your main card, which will be the default method of payment whenever you use your mobile wallet to pay.

Photo courtesy of Visa.

Anytime you see a contactless payment symbol, you can pay with your contactless card or your mobile wallet. You’ll then hold your phone or smartwatch near the payment reader. Note that your payment won’t go through until you verify the purchase with face identification, touch identification, or passcode, adding an extra layer of security.

Related: 6 ways to pay without touching anything

Are mobile wallets safe?

While it may seem dangerous to load all your card information onto your phone or another device, you should know that mobile wallets are safe from fraud. Your data is encrypted and cannot be seen by the merchant (or anyone) once you upload your card details to your mobile wallet.

This is because mobile wallets benefit from tokenization, meaning that your 16-digit card number is replaced by a randomly generated number (token). Consider this compared to traditional payment methods or using your card to dip or swipe at a payment reader. If you pay for a meal at a restaurant normally, a hacker may be able to retrieve your card information from the merchant’s payment reader. When paying with a mobile wallet instead, your true card numbers are safe thanks to tokenization.

But if your phone is lost or stolen, this may present more of a challenge. That’s why you’ll have to enter a passcode or other method of authentication before using your mobile wallet to pay for a purchase. As long as you create a secure passcode or can wipe sensitive information from your device if it’s lost or stolen, it’s virtually impossible to get access to your cards.

Remember that you can also deactivate your card immediately, and your issuer will send you a new card in the mail. In the meantime, you won’t be liable for any unauthorized charges on your credit card.

Related: Credit card fraud: How to spot and report it

Pros and cons of mobile wallets

Admittedly, I have lots of cards to keep up with — eight and counting. I’m a huge fan of Apple Pay, my mobile wallet of choice. This way, I only have to keep a few cards on me at once (whether I’m prioritizing a particular card to earn a sign-up bonus or using cards that offer bonus rewards for everyday spending, such as on groceries or dining).

I’m actually getting more use of cards that I’ve neglected in my wallet, thanks to Apple Pay. If you’re also a points maximizer who’s constantly doing math in their head — thinking about which cards to use for what purchases — it’s nice to see all your cards displayed on one screen. I can rotate cards to pay with much easier than with a physical wallet.

Of course, there are a few cons of using mobile wallets. While mobile wallets and contactless payments have been on the rise (especially in the past year), some merchants may not offer this payment option at all. Therefore, you shouldn’t totally rely on a mobile wallet; rather, it should serve as a backup payment method to the main cards you keep on hand.

In terms of security, there’s not too much I’m concerned about. Because I’ll have to authenticate my payment with face identification or my passcode, it’s unlikely that your cards will be used if someone steals your phone. The only downside is that I had to set up a passcode for my Apple Watch to use Apple Pay (which I didn’t have previously), which is a mere inconvenience for the sake of security.

Bottom line

To answer the overarching question, yes, mobile wallets are safe. When you load your card information onto your app, your data is encrypted and tokenized — making it more secure than traditional payment methods. While you shouldn’t solely rely on a mobile wallet as not all merchants may accept contactless payments, I’m thankful that they’re much more prevalent in today’s world.

Featured photo by Westend61 for Getty Images.

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