Mobile Wallet Security 101: How to Keep Hackers Out and Make Digital Life Safer

If hackers had a wish list, your mobile wallet would be at the top: Is yours locked down? Or does the topic of mobile wallet security hit a sore spot? If so, you’re not alone: 93% of your fellow peers say hacking is the main reason holding them back from further using their wallets. 

A 2025 Consumer Report evaluation confirms that concerns about mobile wallets center around security (42%) and privacy (36%). If you worry your mobile wallet is a target, this article breaks down the latest strategies on how to safeguard your money and data in the digital age. 

From niche to necessity: Why mobile wallet security can’t wait 

In 2012, only 3% of U.S. smartphone owners used mobile wallets. The real surge in mobile wallet use didn’t occur until the pandemic, when the need for contactless payment solutions accelerated adoption dramatically. Today, mobile wallets are a mainstream payment method. 

According to Thunes’ 2025 Mobile Wallet report, there will be an expected 5.8 billion mobile wallet users by 2029 (that’s more than 2/3 of the earth’s population). In countries like Norway, digital payments are already the #1 payment method, with cash used in just 4% of transactions.  

In the U.S., 90% of retailers accept Apple Pay, which consumers use in 53.7% of in-store mobile wallet transactions. Meanwhile, 68% of British residents actively avoid cash-only businesses - and if the trajectory holds - the U.K. is set to become a cashless society by 2043. 

So, is the future of money digital? While the jury’s still out on that, we can all agree mobile wallets are transforming the way we live, bank, and shop. So, it’s critically important to know how to best protect what’s yours – should you choose to use them regularly. 

The “Swiss Army Knife” wallet: How your phone became your bank, ID, and event ticket 

The six (6) perks that could unlock exclusive deals, faster checkouts, hassle-free travel – and even bigger sweepstakes action 

Mobile wallets – a subset of digital wallets – have truly become our “everything” wallet.  

While digital wallets are primarily for online use, mobile wallets are for both online and in-store use. 

If you’re new to mobile wallets, don’t worry - we’ll walk you through the basics.  

And if you’re already a pro user, stick around for advanced tips on keeping your wallet secure. 

For newbies, we’ll answer a popular question we’re often asked: What’s a mobile wallet? In a nutshell, it’s an app on your smartphone that stores all your payment methods, such as credit cards, debit cards, gift cards, and banking info. It can even store documents like event tickets, hotel reservations, online boarding passes, and vaccination cards. 

You can download a mobile wallet app like Google Wallet at the Google Play Store. If you have an iOS phone, try Apple Wallet at the App Store. 

	What can your mobile wallet do?
Banking	Store digital versions of your credit, debit, and prepaid cards Make peer-to-peer payments or split bills with friends, roommates, and family members
Shopping & e-commerce	Make in-store and online purchases Shop within social media apps, such as using Apple Pay to purchase NFTs (non-fungible tokens) within Instagram’s in-app NFT marketplace
Event tickets	Store event tickets, which can be scanned for quick entry to theater performances, sports events, and concerts Mobile wallets like Apple Wallet (iOS) and Google Wallet (Android) let you store event tickets and get event updates, such as a change in venue or performance schedule.To enter the event, you either show your ticket’s bar code or tap your phone if NFC-enabled terminals are present.
Travel	Store boarding passes, hotel keys, and transit tickets to allow check-in by phone Link to reward programs for easy point accrual and redemption
Loyalty & coupons	Store loyalty cards to earn and redeem points Mobile wallets like Google Wallet lets you store loyalty cards and gift cards. You can add a loyalty card directly from a partner vendor’s website/app or automatically import it from Gmail. To add a gift card, you can either scan your card or add the card info manually.
Sweepstakes & Promotions	Get instant digital coupons and promotional offers for redemption at checkout. Through platforms like WalletThat, you can add digital passes for promotions and coupons directly to your Apple Wallet or Google Wallet. Enter sweepstakes automatically after making eligible purchases or submitting an entry. For example, you can submit sweepstakes entries within the Samsung Wallet app.

The five (5) different types of mobile wallets and how each is perfectly tailored to your digital experience 

Mobile wallets come in several forms: 

	Types of mobile wallets
Merchant wallets	Also called closed loop wallets Linked to specific merchants or retailers Examples: Starbucks app, Walmart Pay, Amazon Pay
Mobile platform wallets	Also called open loop wallets, which can be used at a wide range of merchants, both online and offline, by leveraging global payment networks like Visa and Mastercard Examples: Apple Pay, Google Pay, Samsung Wallet, PayPal, Venmo
Semi-closed loop wallets	Can be used among a wide, but not universal, network of merchants and partners Typically offered by mobile telecom providers in emerging markets or regions such as Africa and Asia Examples: M-Pesa (7 African countries), Orange Money (18 African countries), Mobikwik (India), PayTM (India), Alipay (China), WeChat Pay (China), GCash (Philippines)
Gig economy wallets	Designed to address the needs of gig economy workers Popular among users without traditional bank accounts Enables instant access to earnings and seamless in-app financial transactions Examples: GrabPay (Southeast Asia), M-Pesa (7 African countries), GCash (Philippines), Papaya Global Wallet (worldwide – over 160 countries)
B2B wallets	Contactless payment solutions for business Designed for both web and mobile use Supports high-volume payment processing, real-time account updates, sales tracking, multi-currencies, and cross-border payments Examples: Payoneer, Rapyd, and Outpayce

How mobile wallets really work  

The 5-second transaction: What actually happens when you tap to pay? 

Here's a play-by-play of what happens the moment you tap your phone at checkout: 

1. Authentication: First, you unlock your mobile wallet app using biometrics (face or fingerprint), a PIN, or passcode. This step ensures only YOU can authorize payment for your items. 

2. Payment selection: Choose the card you’d like to pay with. Most mobile wallets let you store multiple cards, which can help you maximize your credit card rewards. 

3. Payment transmission: You hold your mobile device near the payment terminal. Depending on the tech, your phone will communicate with the terminal using: 

• NFC (Near Field Communication): This is the most common for in-store tap-to-pay. Your phone communicates with the POS (point-of-sale) terminal to exchange encrypted payment info wirelessly within a short distance. 

• MST (Magnetic Secure Transmission): This technology uses magnetic waves to transmit data, mimicking the action of swiping a card’s magnetic stripe. 

• QR Codes: To pay, you’ll scan the code with your smartphone’s camera and then authorize the payment with your mobile wallet. 

• Bluetooth or beacon technology: Bluetooth beacons enable completely hands-free, card-not-present transactions, so you never have to stand in line ever. 

4. Tokenization and security: Your actual card details are never shared. Instead, your mobile wallet sends an encrypted token and one-time security code for each transaction. Even if intercepted, this info will be useless to hackers. 

5. Authorization: The merchant’s POS system sends the tokenized payment details to their payment processor, which routes it to your card issuer or bank. The issuer will verify the token, check for sufficient funds, and approve (or decline) the transaction. 

6. Confirmation: Once the transaction is complete, you get an instant notification on your phone. If your payment was approved, you’ll see details such as the amount, business name, and time. 

7. Earned rewards: Finally, some merchants will automatically apply extra rewards for mobile wallet payments. For example, Kroger mobile wallet transactions earn 5% on the first $3,000 in purchases annually, regardless of where the transaction occurred (this includes all Kroger locations). If you swipe your regular card, you get 2% back at Kroger stores and 1% outside of Kroger stores.  

 

Tip: Make sure you have the right mobile wallet to get extra rewards. For example, if you shop at Kroger, “mobile wallet" means Apple Pay®, Samsung Pay, Google Wallet®, or Garmin Pay. 

The future of digital wallets: Predictions, trends, and the next big disruption 

As mentioned, mobile wallets have evolved from a basic contactless payment solution during COVID-19 to mainstream use.  

During the height of the pandemic, the use of contactless payments rose 40%, with 67% of retailers accepting some form of no-touch payment at point of sale. 

Of those consumers who made contactless payments, 62% paid with mobile wallets. 

Today, mobile wallets are fueling both e-commerce and the global gig economy. Mobile wallet transaction values are set to jump to $17 trillion, while QR code payments alone are expected to top $3 trillion this year. 

Cross-border real-time payments are growing mobile-first economies in Southeast Asia and Africa. As a result, gig economy payouts are set to hit $1 trillion by 2028.  

Will AI replace your wallet?  

As we march towards 2030, AI won’t necessarily replace your wallet, but it may just BECOME your resident financial advisor: 

• Personalized financial coaching. AI-driven wallets will analyze your habits and nudge you to make smarter decisions. Overspent on midnight takeout binges this week? Your wallet will tell you before your bank account suffers. 

• Predictive recommendations. AI will anticipate your needs – reminding you to pay your bills, suggest savings & investment strategies, and even generate personalized travel itineraries, including recommendations for lodging, restaurants, and activities. 

• Smarter fraud detection. AI can track transaction patterns to identify and flag suspicious activity, ensuring secure access and preventing fraud. 

• Voice-activated transactions. AI can enable voice-activated commands to mobile wallets for ordering food, making payments, or booking services. 

• Seamless cross-border payments: Platforms like TerraPay seamlessly connects over 3.7 billion mobile wallets across 200 sending and 144 receiving countries. This allows users to send and receive money internationally with just a mobile wallet. TerraPay uses agentic AI to automate key processes like customer support, anomaly detection, and compliance checks - all while maintaining human oversight to ensure accuracy, reliability, and security. 

Digital wallet FAQs: Everything you wanted to know but were too embarrassed to ask 

Can you really lose all your money in a digital or mobile wallet? 

Unfortunately, the short answer is yes. Here’s why: 

• If your phone is lost and your mobile wallet isn’t protected with strong passwords and MFA, someone could access and drain your wallet funds.  

• Many mobile wallets may not be entirely insured. If you keep money in Cash App, Venmo, Samsung Pay, or Apple Cash, you’ll have to take steps to obtain FDIC insurance. Otherwise, you may not be able to recover your funds if your wallet provider fails or is hacked. 

• Mobile wallets like Apple Wallet, Google Wallet, and Samsung Wallet don’t have fraud monitoring. In 2024, consumers lost $347 million to scams on digital wallet payment apps, with the average loss an alarming $4,627. If you fall for a phishing scam, you’re unlikely to receive much help from these companies. 

Tip: To keep your wallet safe, set up biometric authentication for screen lock verification. For example, if you use Google Wallet, choose Class 3 biometric unlock (the highest tier of biometric authentication defined by Android) - rather than a password, pin, or pattern - for tap-to-pay. 

Are mobile wallets safe for kids and seniors? 

Mobile wallets can be safe for kids and seniors, but it’s important to educate them about their risks. 

For kids, you may be interested in Mazoola, the only mobile wallet compliant with COPPA (Children’s Online Privacy Protection Act). COPPA certification means Mazoola meets strict standards for protecting the privacy of children, including: 

• Obtaining verifiable parental consent before collecting, using, or disclosing personal information of children under 13 

• Maintaining a clear and accessible privacy policy 

• Providing parents the ability to review personal information collected about their child, revoke their consent at any time, and request deletion of their child’s data 

• Limiting behavioral advertising towards children without parental consent 

With Mazoola, you can view your child’s transactions, pay them for chores, approve retailers & spending limits, and develop lesson plans to teach them about finances. 

Finally, while there aren’t mobile wallets specifically geared towards seniors, setting up a mobile wallet alongside apps like EverSafe can help.  

For example, EverSafe can monitor your loved one’s bank accounts and credit cards set up in Google Wallet. It can track daily transactions for suspicious events, such as missing deposits, unusual withdrawals, changes in spending, and late bill payments – and send you alerts about them. 

Does a mobile wallet keep your information safe? 

While many mobile wallet companies implement comprehensive technical security measures such as tokenization and data encryption to protect consumers, most don’t practice data minimization. For example, Cash App, PayPal, Venmo, and Samsung all share data for marketing purposes. 

However, if you use Google Wallet, you can leverage Google Find My Device to remotely lock your phone to avoid someone getting into your wallet.  

Can I use my mobile wallet on my smartwatch? 

Some mobile wallets like Google Wallet allow you to store passes like loyalty cards, gift cards, and tickets on your smartwatch. Meanwhile, Samsung Wallet can transform your Samsung phone or smartwatch into a digital wallet, so you can store debit, credit, and gift cards securely.  

Which mobile wallet is best for international transactions? 

The best mobile wallets for international transactions include MetaMask, FuncWallet, Coinbase Wallet, and Ledger. 

Can I use Apple Pay on an Android phone? 

No, you can’t use Apple Pay on an Android phone. 

If you have an Android, your best alternatives include Google Pay and Samsung Wallet. 

Which mobile wallet is best for peer-to-peer payments? 

The best mobile wallets for peer-to-peer payments include Venmo, Cash App, and Zelle. 

Can you take contactless payments on iPhone? 

Yes, you can take contactless payments on iPhone. Apple offers “Tap to Pay on iPhone,” which supports payments from PayPal, Apple Pay, Shopify, Venmo, and more. 

Can you accept contactless payments on Android? 

Yes, you can accept contactless payments on Android. You’ll have to install a payment app that offers “Tap to Pay on Android,” such as Square or Stripe and then make sure your phone’s NFC settings are enabled. 

Peace of mind, every time you pay: Join millions who enjoy fast, secure access  

If you’re using a mobile wallet, this may be the most important message you read today. 

Here’s the truth: your wallet is only as secure as your password.  

And today’s hackers are using AI to make scams faster, smarter, and harder to detect.  

If you’re thinking ChatGPT can help you create stronger passwords, here’s why that’s a dangerous practice. 

At LastPass, we make mobile wallet security easy – so you never have to: 

• Create another password again 

• Type in your password every time you want to access your mobile wallet 

• Worry about hackers breaking in and helping themselves to your hard-earned cash 

With LastPass, your passwords (and anything you store in your mobile wallet) are protected by AES-256 military-grade encryption, the same technology trusted by security experts and millions of our customers across the world. 

Our built-in password generator also auto-generates strong passwords for you, so you don’t have to create them yourself. 

With LastPass Premium, you also get six (6)powerful benefits our customers continually rave about: 

• Unlimited access to your passwords, IDs, and documents anytime, anywhere, and on any device of your choice 

• Advanced MFA tech to protect your most sensitive data and assets 

• 24/7 proactive Dark Web Monitoring to notify you of any at-risk accounts – so you can take immediate action to protect your money and data 

• Autofill on legitimate sites only to protect you from phishing scams 

• Emergency access to guarantee your loved ones have access to your info in case of a crisis 

• 1GB of file storage to create digital backups of your most important documents like passports, insurance info, membership cards, and more. 

And that’s not all: You can get all of this for 30 days FREE (no credit card or commitment required) when you try LastPass Premium. At LastPass, we make mobile wallet security simple, secure, and seamless – so you can get back to the important things in life.