Digital wallets: A secure way to manage money

Digital wallets have transformed how we handle money, making it easier and more convenient to manage payments and finances. 

For older Australians, these tools offer a way to make secure, contactless payments using just a smartphone, smartwatch, or other devices. However, it’s important to understand how they work and the steps you can take to ensure your financial information remains safe. 

A digital wallet is an electronic version of a physical wallet. 

Instead of carrying cards in your pocket or purse, you can store your debit and credit card information digitally on your phone or on other smart devices.

With a digital wallet, you can make purchases quickly and securely, without needing to use your physical cards. Some popular examples of digital wallets are Apple Pay, Google Wallet, and Samsung Pay. 

In addition to making payments, digital wallets can also store other essentials, such as loyalty cards, tickets, and even identification in some cases. 

This makes them not only convenient but also a great way to streamline how you carry your information and manage your finances. 

While digital wallets offer convenience, security should always be top of mind, especially when you are linking your debit or credit cards to them. 

Digital wallets are generally secure, but it’s important to take a few precautions to protect your personal and financial information.

Here are some essential tips to keep your digital wallet safe: 

• Use strong passwords or biometrics: Ensure your device is protected with a strong password, PIN, or biometric authentication such as fingerprint or facial recognition. This adds an extra layer of protection if your device is lost or stolen. 

• Regularly monitor your transactions: It’s important to regularly check your bank or card statements for any unusual or unauthorised transactions. Catching suspicious activity early can help prevent further issues. 

• Keep your device software up-to-date: Updating your phone or device's software ensures that you have the latest security features to protect your information. (Note: some older phones will no longer update, so it may be time to get a new one.)

• Be aware of scams: Scammers may try to trick you into sharing your login or card details. Always be cautious of unsolicited messages, calls, or emails asking for personal information, including One Time Passcodes (OTPs) to authenticate certain transactions. 

It is important to never share your passcode with anyone, including your financial institution. 

One of the key security features of digital wallets is tokenisation. This process helps protect your financial information when making payments. When you add your card to a digital wallet, your card number is replaced with a randomly generated series of numbers known as a “token”. 

The token is used to process your payments instead of your actual card number. This means that when you pay using your digital wallet, your real card details are never shared with the merchant or the payment system. 

Tokenisation adds a layer of security, helping to protect your financial information during transactions.

Here are some additional simple tips to help you use your digital wallet securely:  

• Stick to trusted apps: Use well-known digital wallet platforms such as Apple Pay, Google Wallet, or Samsung Pay. These platforms offer built-in security features.  

• Set up transaction alerts: Many banks allow you to set up alerts for transactions made with your digital wallet, so you’ll be notified immediately if any unauthorised payments occur.  

• Disable if your device is lost: If your phone is lost or stolen, disable your digital wallet right away. You can either lock your device or contact your bank to unlink your cards.  

For older Australians, digital wallets offer a convenient and secure way to manage everyday finances. They allow for fast, contactless payments, help you keep track of your spending, and can store important cards and information in one place. 

However, understanding how digital wallets work and taking steps to ensure their security will help you confidently use them in your daily life. 

With the right precautions, digital wallets are a practical and efficient tool for managing your money in today’s digital age.  

Stay one step ahead of scammers by arming yourself with knowledge and taking proactive measures. Download our comprehensive Scam Protection E-Guide.