What is a Mobile Wallet?
The meaning of a mobile wallet refers to a digital wallet that can be accessed through a smartphone or tablet. It allows users to store and manage their financial information, such as credit and debit cards, and use this information to make payments or transfer funds.
A mobile wallet functions similarly to a physical wallet, with the added benefit of being accessible from anywhere with an internet connection. Users can add their credit and debit cards to their mobile wallet, which can then be used to make payments at participating merchants, online or in-person. Additionally, mobile wallets can be used to store and manage other types of financial information, such as loyalty and reward cards.
One of the main benefits of using a mobile wallet is increased security compared to carrying physical cards. When a card is added to a mobile wallet, the user's card information is encrypted and stored securely on the device. Additionally, many mobile wallets use biometric authentication, such as fingerprints or facial recognition, to ensure that only the authorized user can access the wallet.
Another benefit of mobile wallets is the convenience they offer. With a mobile wallet, users no longer have to carry physical cards, and can make payments or transfer funds with just a few taps on their smartphone. This can save time and reduce the risk of losing or misplacing a physical card.
Simplified Example
A mobile wallet is like a special wallet you keep on your phone instead of in your pocket. Instead of carrying cash and cards, you can keep your money and the information about your cards in this digital wallet. You can use it to buy things, just like you would with a real wallet, but you don't need to take anything out of your pocket.
The History of Mobile Wallet
In the early 2000s, the term "mobile wallet" surfaced alongside the surge in smartphone usage and the burgeoning popularity of mobile payments. Its exact origin is a bit unclear but likely arose to distinguish between traditional web-based digital wallets and the new mobile-specific payment solutions.
While the concept of mobile wallets dates back to the 1990s with early experiments in mobile-based payments, the true breakthrough arrived with near-field communication (NFC) technology in the early 2000s. This advancement paved the way for a revolution in payment methods, enabling users to simply tap their smartphones on NFC-equipped terminals to complete transactions, offering both convenience and heightened security, making mobile wallets an appealing choice for consumers.
Examples
Apple Pay: A mobile wallet developed by Apple Inc. for its iPhone and Apple Watch devices. It allows users to store their debit and credit cards, and make secure purchases with a tap of their device.
Google Pay: A digital wallet and online payment system developed by Google. It allows users to store their debit and credit card information, pay for goods and services, and send money to friends and family, all from within the Google Pay app.
Samsung Pay: A mobile payment and digital wallet service developed by Samsung Electronics. It works with both Samsung smartphones and smartwatches, allowing users to make payments, store loyalty cards, and more with a tap of their device.
Related terms
Wallet: A crypto wallet is a secure digital wallet used to store, send, and receive digital currencies such as Bitcoin, Ethereum, and Litecoin.
Micropayment: Micropayments refer to small financial transactions, typically those less than a few dollars.