Digital Wallets: How They Work and Why They Can Be Useful

You’ve probably seen the signs at cash registers saying: Tap to pay. 

These signs designate where you can use a tool called a digital wallet to check out at the register. Digital wallets, also known as e-wallets, can hold virtual versions of physical credit cards and other items—including debit cards and credit cards, insurance cards, airplane tickets, Covid-19 vaccination records, and passports—on your phone, computer, smartwatch or tablet so you can use them quickly and store them securely.

Here are some things to keep in mind about your digital wallet before you start using it, and some pointers about how to set one up on your own phone: 

Why people use digital wallets 

Digital wallets are primarily payment apps that let customers use their smartphones to make electronic purchases, either online or in stores at the register. They work by securely storing a customer’s credit and debit card information, much like a physical wallet. Some examples of digital wallets include Apple Pay, Google Pay, and Samsung Pay.

Purchasing with a digital wallet can be easier, and also more secure. Digital wallets encrypt banking and personal data, meaning it’s encoded and hidden by software, and it’s also protected whenever it’s transmitted in a transaction. 

But they’re not just used to make payments. You can use them to keep identification cards, tickets, and insurance information. And in the world of Covid-19, digital wallets can also store vaccination information so you can enter restaurants and events in some places.

Digital wallets and security

You can use your digital wallet in stores, by tapping your phone at registers that allow digital wallet payments. The technology used is called near-field communication, or NFC. Basically, that’s a complicated term for an encrypted form of payment that lets the chip in your card communicate directly with a merchant’s register.

Every time you use your digital wallet to pay, your phone will send a unique alphanumeric code known as a token to the recipient of your payment. When the retailer processes your payment, it will see that code rather than your full credit card number and information. Each transaction gets its own code to further secure your information. Plus, digital wallet transactions require your password or biometric identification like your thumbprint or a face scan to checkout for added security.

If you use a digital wallet, you can leave your physical cards at home, so you don’t lose them. And if you forget your actual wallet at home, having a digital wallet can give you access to your money on your phone. Digital wallets are also convenient when you’re shopping online from your phone because you can check out without having to get your credit card and information.

Cryptocurrency and digital wallets

Digital wallets are also useful—and necessary— if you want to invest in cryptocurrency. Because cryptocurrencies are still so new, you can’t store them in traditional bank accounts. When you purchase cryptocurrencies, such as bitcoin, a digital wallet can help you securely store your investment. But digital wallets for cryptocurrency are different from the ones where you keep your credit and debit cards. There are two types of digital storage for cryptocurrency: hot wallets and cold wallets. A hot wallet uses software to hold cryptocurrency online. A cold wallet uses external hardware similar to a USB drive to store your investment. Both types of storage require you to know your public key, which is like an account number, and your private key, which is like a PIN number. However, cold storage may be slightly more secure. 

Your Stash card and your digital wallet

The Stock-Back® Card works with Samsung Pay™, Google Pay™ (formerly known as Android Pay), and Apple Pay®, three of the most popular digital wallets today. Having your Stock-Back® Card¹ on your phone can let you make payments with the card just by tapping your phone, or checking out easily online. And by using your Stock-Back® Card¹, you can earn stock when you shop with your digital wallet.²

Here’s one way you can add your Stock-Back® Card to your digital wallet: 

1. Open the Stash app and click on the Bank tab on the bottom of the screen. 
2. Tap on your card and it will flip. 
3. Click “Add to Wallet.”
4. Your digital wallet will then open. Follow the instructions on the screen to add your Stock-Back® Card to your wallet.

You can also add the Stock-Back® Card from your digital wallet:

1. Go to your digital wallet on your phone
2. Follow the instructions on your device to add your card
3. Accept the Terms & Conditions
4. Confirm the security code we send

Once you have your Stock-Back® Card in your digital wallet, you’ll be able to make purchases from your phone, and earn Stock-Back® rewards in the process.