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Internet 101: What is a Digital Wallet?

Internet 101: What is a Digital Wallet?

When it comes to paying at the store, customers have a lot more options these days. Debit and credit cards made it possible to stop carrying cash, and now digital wallets may make it possible to stop carrying your credit cards, too. A digital wallet is an electronic service that lets its customers make payments; in many cases, these digital wallets are apps on our phones. These apps let you save your credit card information and simply use your phone to pay for purchases online and at certain stores. Though this article will focus on in-store use, remember that the digital wallets mentioned below can also be used online.

How It Works

The apps in this article work in stores by using NFC, MST, or QR codes. The type of technology a digital wallet app uses determines which stores your app will work at. Here’s a quick rundown of what your digital wallet might use and how it works:

  • NFC, or Near Field Communication, sends information between two devices that are very close to one another; stores need to have a certain kind of terminal to be able to work with NFC.
  • MST, or Magnetic Secure Transmission, makes a card reader think a card has been swiped; because of this, MST works at more stores.
  • QR codes, or Quick Response Codes, are a kind of barcode that can be scanned to retrieve information.

It’s important to research your options before choosing a digital wallet and adding your financial information to the app. There may be some apps that are unverified or potentially dangerous, so be sure to look up an app before downloading it. Also, most apps include security protocols, so always take advantage of the security system built into an app; for example, some apps ask you to use a PIN or fingerprint before you can make a purchase.

The following list describes some of the most popular and well-known digital wallet apps, as well as some of the stores where you can use each app:

Android Pay

How it works: Android Pay works on Android phones that have NFC capabilities. After downloading the Android Pay app, you can add credit cards, debit cards, gift cards, and loyalty programs, and you can even link your PayPal account. To add a credit card, you can either enter the card’s information manually or simply take a picture within the app. Once you’ve loaded your cards and programs, you can use the app in-store by turning on your phone’s NFC and holding your phone next to the checkout terminal.
Where it works: Android Pay works in stores that have terminals displaying the Android Pay or NFC logos (which you can see on Google’s page by clicking here). You can also open the app, click on the menu, and find out which specific stores accept it at that time. As I write this article, Android Pay is accepted at places like Best Buy, Bloomingdales, GameStop, Macy’s, McDonald’s, PetCo, Walt Disney World, Whole Foods, and many more. For more information, click here to visit the Android Pay website.

Apple Pay

How it works: Apple Pay works on iPhones and Apple Watches. You can add credit cards, store cards, and rewards cards to the app. To add a card on your Apple device, you simply tap to add a new card and then follow the steps to fill out your card information. When you’re paying in NFC-capable stores, you just need to hold your device close to the store’s terminal.
Where it works: Apple Pay works in stores that have terminals displaying the Apple Pay or NFC logos (which you can see on Apple’s page by clicking here). You can also take a look at Apple’s website to see which specific stores accept it at the time. Right now, Apple’s website shows that Apple Pay works at places like the Apple Store, Big Lots, Bloomingdale’s, Chick-fil-A, the Disney Store, GameStop, McDonald’s, QuikTrip, Starbucks, Walt Disney World, and more. For more information, click here to visit the Apple Pay website.

Chase Pay

How it works: Chase Pay is available in the App Store and on Google Play. You can sign into the app with your Chase account and use the app to pay in certain stores, as well as place orders in advance at some restaurants. Chase Pay uses QR codes instead of NFC, meaning stores scan a code on your phone.
Where it works: Chase Pay launched fairly recently, near the end of 2016, so there are few options for paying in-store at the moment. However, Chase Pay can still be used online, and Chase should be adding more in-store options. Right now, you can use Chase Pay at Starbucks and Best Buy. For more information, click here to visit the Chase Pay website.

PayPal App

How it works: The PayPal App is available in the App Store, on Google Play, and in the Windows Phone Store. You can use your PayPal account to sign in on the app and make payments. The PayPal App uses QR codes, so retailers scan the code on your phone in order to make a purchase. You can also place orders in advance at some restaurants, meaning you can just go pick up your food that has already been paid for.
Where it works: To find out where you’ll be able to use the app in-store, you can open the PayPal App, press the “In Store” button, and, using your phone’s GPS, scroll through a list of nearby retailers. For instance, when I tested the app, it told me I could use it at Dollar General and Macy’s. Before deciding on whether to use this app, try opening it in the areas you normally frequent and see which retailers pop up. For more information, click here to visit the PayPal App website.

Samsung Pay

How it works: Samsung Pay is available on specific Samsung devices, including many Samsung Galaxy devices. With Samsung Pay, you can add your credit cards, gift cards, and many loyalty and rewards cards to your digital wallet. Samsung Pay also shows nearby deals, and it has a rewards program. The rewards program allows you to accrue points as you make purchases with the app and spend those points on rewards like gift cards and Samsung products. To pay in-store, you verify your identity in the app and place your phone on the terminal.
Where it works: Samsung Pay uses both NFC and MST, so it’s accepted in a great deal of stores. Like other apps, you can look for the NFC logo on the terminal. Or, since the app also uses MST, you can pay at many stores by placing your phone on the terminal’s card reader, essentially simulating a card swipe. If you’re at a store with a card reader, Samsung Pay will likely work. For more information, click here to visit the Samsung Pay website.

Walmart Pay

How it works: Walmart Pay works through the Walmart App and is available in the App Store and on Google Play. After creating a Walmart.com account and signing in through the Walmart App, you can add the card of your choice to be used for payment, whether it be a major credit card or a Walmart gift card. Using Walmart Pay in stores is slightly different from the other digital wallets mentioned in this article. Walmart Pay uses QR codes, but instead of showing a QR code to the cashier, you use the app to scan the QR code that appears on the card terminal’s screen. The app then uses the card you have on file to make the payment and save a digital receipt. Walmart Pay does work in all the checkout lanes, including self-checkout.
Where it works: Only at Walmart. Walmart introduced Walmart Pay specifically to work in their stores and made most other digital wallets unable to be used there. If you do a lot of your shopping at Walmart, this app could save you some time and hassle. For more information, click here to visit the Walmart Pay website.