What are payment apps?
Mobile payment apps are designed to help you pay for things without using physical cash or cards. Many merchants accept payment apps in their stores and on their websites. Payment apps also allow you to send and receive money from individuals like friends and family.
What are digital wallets?
Think of everything that’s in your physical wallet -- your credit and debit cards, health insurance card, the gift card your parents gave you as a holiday gift and more. A digital wallet is designed to store those kinds of items without having to carry anything besides your phone.
In some cases, a digital wallet serves double duty as a payment app. For example, Google Wallet and Apple Wallet are digital wallet apps that also include mobile payment services.
":"d6e44e97-5498-4df9-9710-73dfdca99a5b","title":"Pros","content":"<ul><li><b>Convenience: <\/b><span style="font-weight: 400;">Many payment apps and some digital wallets make it easy to pay for purchases and send money to friends and family without having to carry multiple cards.<\/span><\/li><li><b>Safety: <\/b><span style="font-weight: 400;">As long as your phone has a hard-to-crack PIN or additional security measures, it\u2019s tough for a thief to steal any of the data in your app. Reputable digital wallets and payment apps come with top-notch encryption to protect your information.<\/span><span style="font-weight: 400;">\r\n<\/span><\/li><li><b>Simplicity: <\/b><span style="font-weight: 400;">Digital wallets let you leave your physical wallet at home and avoid dealing with crumpled boarding passes, physical hotel keys and other items that can weigh down your pockets.<\/span><\/li><\/ul>"},{"id":"977f698f-6127-4839-9392-0ba8fe7ab29b","title":"Cons","content":"<ul><li><b>Ease of spending: <\/b><span style="font-weight: 400;">The downside of fast, convenient payment is that it makes it easier to spend without thinking twice. If you start using one of these apps, make sure you stay focused on budgeting.<\/span><span style="font-weight: 400;">\r\n<\/span><\/li><li><b>More big tech in your life: <\/b><span style="font-weight: 400;">If you\u2019re tired of relying on tech giants like Google and Apple, payment apps are just one more way for them to keep you tethered to their services. Plus, some of them have restrictions that only allow you to work with similar devices. For example, Apple Wallet\u2019s peer-to-peer payments only work with other Apple devices.<\/span><span style="font-weight: 400;">\r\n<\/span><\/li><li><b>Potential phone issues: <\/b><span style="font-weight: 400;">Remember the last time you were heading home and your phone\u2019s battery was dangerously low? If it drains too quickly and you can\u2019t access your transit card, you might be walking instead.<\/span><span style="font-weight: 400;">\r\n<\/span><\/li><li><b>Security isn't foolproof:<\/b><span style="font-weight: 400;"> Although you can keep your data safe with a strong PIN, passcode or other security measures, if someone gains access to your phone and digital wallet, you might find yourself on the phone with your bank and multiple credit card companies trying to freeze your accounts.<\/span><\/li><\/ul>"}]" edition="us">Are mobile wallets and digital payment apps safe?
Yes, reputable mobile wallets and digital payment apps are generally safe. Their enhanced encryption standards offer even stronger protection than you might find with physical cards, so you can feel comfortable using them. However, phones get lost and stolen, so be sure you have the ability to remotely wipe your device and/or cancel your payment information if you find yourself in this situation.
FAQs
A payment app stores your payment information and allows you to make payments online, in person and often to send money to friends and family. A digital wallet offers the tools of a payment app but with more features so you can safely store documents you need, such as your health insurance card, AAA card and boarding passes.
You can use your phone to pay for in-store purchases at many retailers. However, there are still stores that don’t accept mobile payments. For example, Apple Pay is accepted at more than 85% of retailers in the US, which means there are still plenty of businesses that require you to take cash or a card out of your physical wallet.
While your phone may be the most common device to use for digital payments, some digital wallets and payment apps work with other smart devices, including smartwatches and Fitbits.Â
Methodology
We looked at a wide range of established and emerging digital payment services with a focus on positive customer ratings (at least a 4 out of 5 stars in the Google Play Store and/or Apple Store). Additionally, we focused on services with widespread acceptance that offered the ability to use them in as many places as possible.
