In an increasingly contactless world, accelerated by the COVID-19 pandemic, you've probably used a digital wallet to stay safe while paying for goods and services online. If so, you're not alone. According to The Global Payments Report 2021, digital wallets accounted for 44.5% of global e-commerce transactions in 2020, up from 6.5% in 2019. By 2024, digital wallets, credit and debit cards will account for 84.5% of e-commerce spending worldwide.
Digital wallets are already popular and they're here to stay. A digital wallet can make your life more convenient, but how do you keep it safe? Here's a look at the benefits of a digital wallet along with five best practices for keeping it secure.
The benefits of a digital wallet
A digital wallet is a digital payment system that lets you pay for goods and services from your smartphone, tablet, or laptop. During the pandemic, you may have used a digital wallet to safely pay for takeout, groceries, or household goods so you didn't have to exchange cash with someone in person. A digital wallet also lets you quickly pay for your purchases at the store rather than having to fumble around for your physical wallet and pick out exact change while the people in line behind you are waiting.
Digital wallets also have one advantage over regular wallets when it comes to security — even if someone makes off with your phone, they will have a hard time getting into your digital wallet without your passcode or biometric authentication. That said, there are some things you should know about how to keep your digital wallet safe.
5 best practices for keeping your digital wallet safe
To fully enjoy the benefits of a digital wallet, it's important to keep your digital wallet as secure as possible. Here are five ways to keep your digital wallet safe.
- Keep up with data breach monitoring
Far too often, we hear about major data breaches in the news — and sometimes, as we saw with the 2017 Equifax data breach, they can directly affect our finances. It's important to have a timely heads up if one of your financial accounts is breached. That way, you will be able to take action right away and reduce the potential impact on your finances.
Keeping tabs on all of the data breaches that might affect you could be a tall order, however. A password manager's dark web monitoring feature can take care of this for you, automatically alerting you when it has detected a data breach affecting one of your accounts.
- Use authentication
If your digital wallet offers additional authentication options like two-factor authentication (2FA), multi-factor authentication (MFA), or biometrics, consider taking advantage of them. This also applies to any devices you may use to access your digital wallet, such as your smartphone or your laptop.
When it comes to digital wallet security, it's wise to have as many layers in place as possible. By enabling extra authentication, you will make it harder for a cyber attacker to access your digital wallet if they manage to steal, guess, or crack one of your passwords. Speaking of which...
- Practice good password hygiene
Good password hygiene is a must when you're using a digital wallet. You wouldn't leave your physical wallet lying open for others to look at, let alone rifle through. Since you can't touch or see a digital wallet, it's easy to think of it as something abstract that doesn't need the same kind of vigilance. The reality, however, is that malicious actors are just as interested in accessing your digital financial accounts. That's why "I will be security-aware" should be one of your 7 cybersecurity mantras in 2021 and beyond.
It's a good idea to use strong, unique passwords for each of your financial accounts, including the password for your digital wallet. You should also regularly update these passwords so that, if one of your accounts is ever breached, cyber attackers can't use your old password to get in and start poking around.
Password management can sometimes feel like a heavy lift, especially when you have a lot of passwords to keep track of. A password manager can streamline all of this for you by storing your passwords in an encrypted vault and automatically filling them in for you when it's time to log in. Even better, it can alert you when one of your existing passwords is out of date and generate a new secure password to take its place.
- Keep your payment information up to date
Did you get a new card from your bank or financial institution? Make sure to update it in your digital wallet. That way, there's less of a chance that one of your financial accounts could be compromised in the event of a breach. You'll also have an easier time making purchases using your new card.
- Don't make purchases over public Wi-Fi
Although public Wi-Fi might seem helpful, it isn't secure. If you make a purchase while connected to public Wi-Fi, it's possible someone could see your financial information and then try to use it to commit fraud later on. It's generally safer to use your phone's cellular connection or a virtual private network (VPN) when making sensitive transactions.
Keep your digital wallet safe with smart security steps
Chances are, your digital wallet helped you stay safe while spending more time online. A digital wallet will come in handy in the future, too, letting you quickly and easily pay for goods and services without having to hunt for your wallet, exact change, or a specific card. By taking these smart security steps now, you can fully enjoy the benefits of a digital wallet.
Learn how to take advantage of everything a digital wallet has to offer. 
