Are mobile wallets safe?
If the coronavirus has highlighted any trends, a big one is that people don't want to touch things they don't need to.
Most of the credit cards in your wallet probably offer contactless payment capabilities these days. 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. I've also found that these payments are faster, meaning more convenience on my end.
Another increasingly-common trend 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 wonder 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.
How mobile wallets work
There are many mobile wallets to choose from. Perhaps the best (and easiest) option is to use whichever mobile wallet comes preloaded on 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's name and the credit 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 cards in your mobile wallet.
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, the full credit card number or any sensitive information isn't visible on your device. 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.
Anytime you see a contactless payment symbol, you can pay with your contactless card or your mobile wallet. You’ll then hold your credit card, phone or smartwatch near the payment reader. If you're paying with your phone or smartwatch, your payment won’t go through until you verify the purchase with facial identification, your fingerprint or your passcode, which adds an extra layer of security.
Related: 3 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 credit card 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 full credit card number is replaced by a randomly generated number, or 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 by swiping your card, 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 what if your phone is lost or stolen? Couldn't someone just use the credit cards loaded into your mobile wallet? It's not likely. This is because you need 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 remotely wipe sensitive information from your device if it’s lost or stolen, it’s virtually impossible to get access to your cards.
In fact, Apple recently released three separate videos in the U.K. touting Apple Pay as more secure than credit cards, highlighting these very features. If you're interested, those videos are here, here and here.
Remember that you can also deactivate your card immediately, should you lose either your physical card or your phone with the card loaded into a mobile wallet. In this case, notifying the issuing bank will result in a new card being sent to you 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
The Federal Communications Commission also has a list of best practices for mobile wallet users that includes tips like being mindful of your surroundings when making payments, using unique passwords for each app on your phone and making payments while connected to public Wi-Fi networks.
Pros and cons of mobile wallets
Admittedly, I have lots of credit cards to keep up with — 26 at present. 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 striving to use the best credit card for each spending category, such as everyday spending, groceries or dining).
If you're often thinking about which cards to use for which purchases, it’s nice to see all your cards displayed on one screen. I find this easier to sort through than carrying around a physical wallet with 26 credit cards in it. Admittedly, I don't have all of my cards loaded into my mobile wallet at the same time. (There's usually a limit.)
Of course, there are a few cons to using mobile wallets. While mobile wallets and contactless payments have been on the rise (especially in the past few years), 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. Additionally, the tap-to-pay feature may stop working at some of these terminals without explanation, and not having a physical card with me forced me to abandon a purchase at my local CVS recently.
In terms of security, the risks in using a digital wallet are much lower than the risks associated with losing your physical wallet or exposing your credit card number when swiping the card. Because I have to authenticate my payment (which can be done with face identification, passcode or fingerprint), it’s unlikely that my cards will be used if someone steals my phone. The only downside is that you'll need to set up a passcode for your Apple Watch to use Apple Pay on your watch in addition to your phone — though this is a momentary inconvenience for the sake of increased security.
Bottom line
To answer the 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, they're becoming increasingly common. That's great for convenience and security, which don't often go together.
Additional reporting by Stella Shon.
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Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
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- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.
Rewards Rate
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
| 2X | Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Intro Offer
You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
$325Recommended Credit
Credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.Excellent to Good
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.