What is the difference between a digital wallet and a bank account?

Digital payments are on the rise: by 2023, it’s estimated that more than 6.1 billion people will be using alternative methods of payment – including digital wallets. 

The widespread acceptance of digital wallets has been a long time coming. For example, ApplePay was introduced more than seven years ago, allowing early adopters to make payments with a fingerprint approval. The first e-wallet champions were tech-savvy millennials comfortable with technological advancements, and the global pandemic pushed billions of others to embrace contactless payments and digital currency. 

Today, digital wallets are trumping traditional bank accounts. Safer, more secure, and more cost-effective, there are more reasons now than ever to download a digital wallet. Here are the differences between digital wallets and bank accounts.

A digital wallet is the ultimate travel-light accessory

A digital wallet eliminates the need for a physical wallet. Loaded with digital cash, it’s also a place to store membership and loyalty cards, receipts, forms of identification, and tickets. Keeping all of these transaction-enabling items in one e-wallet makes life easier.

Generally speaking, to access funds from a bank account you’ll need to carry a debit or credit card. Some banks have advanced and are equipped for cardless withdrawals, however, a trip to an ATM is still required for you to get some cash into your physical wallet.

Digital wallets are a money saver

Fees for maintaining bank accounts and credit cards have long been the bane of those trying to save and spend responsibly, or stack up those frequent flyer points. These monthly fees add up over time and coupled with interest rates or late fees if you’re not paying your bills on time, it can be hard to get ahead. 

The cost of downloading and maintaining a digital wallet is absolutely zero, and the savings will add up.

Digital wallets are accessible for everyone

Not everyone has the ability to open and maintain a bank account and loses out on being able to easily receive payments for work or remittances from friends and family. 

Digital wallets are proving particularly useful in developing nations, particularly rural areas, as many don’t require a bank account with a physical branch. This enables users to save and spend their money without incurring fees or having to make a trip to a bank branch. 

A digital wallet is more safe and secure

If you happen to lose your wallet, whoever finds it will have full and immediate access to your cash, identification, and credit cards. A lot of damage can occur before you’ve even noticed. 

Losing your smartphone where your digital wallet is stored is highly inconvenient, but chances of the finder being able to get past your lock screen and accessing anything other than your wallpaper are very lo

In fact, when a credit or debit card is added to a digital wallet the actual card number isn’t stored on the device. Unique codes are used to verify payments without the card number being shared.