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Digital Wallets in Canada – the complete guide

Technology has found vast applications in all areas of our lives, thus making a living more accessible. Wherever we turn, we discover a touch of this significant phenomenon – healthcare, agriculture, education, transportation, and even commerce. In our times, success in e-commerce is about eliminating barriers in transactions. The slightest difficulty at the point of the transaction can make one lose sales. But, on the other hand, the easier and more convenient it is for the customer to make secure payments, the more sales you can make, thus reducing the risk of shopping cart abandonment. In this case, electronic wallets can go a long way towards facilitating easy and secure payments.

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Written by: Big Piggyy

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What is an electronic wallet?

 

An electronic wallet (also called an e-wallet or digital wallet) is a type of electronic card used for transactions made online through a smartphone or computer. E-wallets offer a convenient way to pay for online transactions as all you need is a smartphone and an internet connection. The utility it provides is very similar to that of a debit or credit card. For example, you can deposit money from your bank account into your electronic wallet and efficiently use its services.  

 

Electronic wallets are software-based systems that securely store users’ payment information and passwords. Through the use of e-wallets, users can complete transactions quickly and easily. In addition, users can also create stronger passwords without worrying about whether or not they will be able to remember them. To a great extent, e-wallets eliminate the need to carry a physical wallet as it stores users’ payment information compactly and securely. In addition, electronic wallets can be integrated with mobile payment systems, enabling customers to complete transactions using their smartphones. Top digital wallet companies include Apple Pay, Google Pay, Venmo, Samsung Pay, PayPal, and Walmart Pay.

 

The two primary components of e-wallets include software and information. The software component stores the user’s personal information and ensures the security and encryption of such information. On the other hand, the information component provides a database of details given by the user. Information provided generally includes their name, payment method, shipping address, credit or debit card details, amount to be paid, etc.

 

e-wallets

 

Near Field Communication (NFC) Technology

 

Electronic wallets function through Near-Field Communication (NFC) technology. NFC is a short-range wireless connectivity technology that enables communication between NFC-enabled devices. It is a technology used for contactless data exchange over short distances. With NFC, information can be transferred easily and quickly between devices with a single touch – be it exchanging business cards, paying bills, sharing a research journal, or downloading coupons. In addition, NFC technology dramatically reduces the chance for human error because the receiving device reads the data the instant it is sent. 

 

Types of Digital Wallets

 

There are two types of digital wallets – hot wallets and cold wallets. While hot wallets require connection to the internet, cold wallets do not. Most e-wallet holders generally have a hot wallet and a cold wallet. They use hot wallets to make quick payments, while cold wallets store and hold money as it requires no connection to the internet. 

 

Why should you consider making one?

 

E-wallets are fast gaining popularity amongst many consumers, and this is because of the benefits it possesses. Making a digital wallet is essential for many reasons:

 

Declutter your wallet

 

Owning a digital wallet can help to declutter your physical wallet. For example, you can add your credit and debit cards to your electronic wallet when you input the cards’ information on the app. Depending on the configuration of the e-wallet, you may also be able to make purchases from a smartwatch or computer. In addition to this, e-wallets can also store other items such as coupons, gift cards, concert tickets, membership cards, sports tickets, etc., that occupy space in your physical wallet.

 

Earn bonus rewards

 

With an electronic wallet, you may be able to earn rewards from promotions, credit cards, or the e-wallet platform itself. Some credit cards offer special incentives when adding them to your digital wallet. For instance, the Apple Card earns 2% cashback on all Apple Pay purchases. Google Pay and Samsung Pay also offer the chance to earn additional rewards when shopping with specific merchants using their app.

 

Easily track your expenses

 

Some digital wallets can aid in managing your finances. For instance, the Google Pay app tracks your spending patterns, offers access to the total sum across all linked accounts, and gives you a view of the remaining balance.

 

Fraud protection

 

Electronic wallets often require you to verify your identity with a pattern, fingerprint, PIN, or other options before making payments. This is an extra layer of security that is not available with physical wallets. In addition, digital wallets use a transaction code for purchases. Upon completing the transaction, the e-wallet requests a token to represent the card. This is a process called tokenization.

 

Say bye to germs

 

COVID-19 has left with us one rule – avoid unnecessary touching. With digital wallets, this is enhanced even more. Since you do not have to hand a card to different merchants who have handled cards and cash before your transaction, there is a limitation to touching. Also, you do not need to touch the payment terminal. Simply open the e-wallet, select the card of choice and place the back of the phone close to the payment reader to make payments. 

Pros and Cons of e-Wallets

pros

  • Smooth purchase experienceThey offer a seamless purchase experience. A digital wallet lets you limit the number of cards you carry. To make transactions, you only need to pay via the e-wallet app on your smartphone or scan your smartphone device to an NFC-enabled PoS system. This only takes a few seconds to complete thus ensuring a seamless purchasing experience.
  • Enhanced securityE-wallets mitigates problems associated with missing cards or wallets. Although smartphones could also get missing, they could be protected with biometrics and passwords. If these security features are enabled, they restrict access to ensure that only you can use your device. Also, all the data you have in the application is encrypted and never shared with third-party organizations. 
  • Select a card of your choiceDigital wallets allow you to use the card you prefer to make your transactions. Since you can also add a variety of other cards, you can use your coupons, loyalty cards, reward cards, or gift cards as you wish. 
  • Cost-savingDigital wallets generally charge a fee for some transactions or functions. For instance, reloading a prepaid card from a credit card source might incur a small charge. However, the ease of use, time savings, security, and seamless purchase experience when combined far outweigh these fees.
cons

  • It might not be acceptable everywhereNot every business or online merchant accepts e-wallet payments. Hence, you might still need to carry cash about or find alternative solutions.
  • Single device dependencyHaving everything you need inside a smartphone sounds very good, but the fun comes to an end when your device is out of power, breaks down, or has internet connection issues. For example, if you make payments in the store or restaurant and your device goes off, you would only be saved by your cards or liquid cash.
  • Security concernsEnhanced security has been mentioned as a Pro of digital wallets, but more things are to consider. First, since your device security supports the app’s safety, it is vital to ensure the security of your device. Otherwise, it would be easy for your digital wallets to be used in the case of theft. In addition, you have to ensure the trustworthiness of the e-wallet provider, or you will face digital hacks.

Differences and Similarities from old school methods

 

The similarities and differences between the old-fashioned banking methods and the opportunities presented by using electronic wallets are shown based on accessibility, convenience, finance management, and security.

 

Accessibility

 

Digital wallets store a variety of cards in addition to credit and debit cards. This means you can store loyalty cards, reward cards, gift cards, and coupons within your digital wallet, thus enjoying a cashless lifestyle. 

 

Convenience

 

With a digital wallet, making transactions is more convenient. You do not need to search for your cards at the store, thus making it faster to checkout. Also, you can efficiently utilize your coupons when checking out on an online store.

 

Finance Management

 

Digital wallets help to keep track of expenses, thus managing your finances. They do this by keeping records of transactions, something a physical wallet lacks.

 

Security

 

Digital wallet offers security in the sense that unwanted transactions are minimized because authorization is always needed in the form of passcodes or biometrics. This is unlike traditional methods in which a stolen credit card can be used if any confidential information is known.

 

How to create an e-Wallet

 

Electronic wallets offer a safe and convenient mode of making payments and transferring money to your contacts. To open an e-wallet, simply follow the steps outlined below:

 

Download the application

 

There are e-wallets for android and iOS. To get started, download the e-wallet application from your phone’s mobile store.

 

Fill in the appropriate details

 

Once the application has been installed on your device, fill in details such as name, email address, date of birth, and mobile number. Some applications will require you to create a user ID and password to access the application. 

 

Set a PIN

 

Usually, the final step of the registration process involves the user setting a numeric PIN. Once the PIN has been set, a one-time password (OTP) is sent to the registered mobile number. The user has to enter this number to complete the registration.

 

Link your cards

 

Upon completing the registration process, proceed to link your various debit and credit cards to the digital wallet. This is done by entering the necessary card details or by scanning the card with your mobile phone. You can also link your existing online banking account to facilitate the easy transfer of funds into the wallet.

 

Proceed to make payments

 

Once you have set up your e-wallet, you can make payments. Depending on the payment situation, different methods could be implemented. For example, there is usually a one-or-two-click payment when shopping on your smartphone to make it as easy and fast as possible. When shopping at a retail location, simply hold your device over the PoS system wherever you sight the contactless symbol. If you want to make a payment on an application, you could also use your digital wallet as a payment option. 

 

What to do if my mobile device (which carries my e-wallet) is stolen?

 

One of the major cons of using e-wallets is the sudden loss or theft of the device. If your mobile device containing your e-wallet is stolen or misplaced, simply contact the wallet provider either through email or by visiting their physical location. Provide them with the details of the account so it can be blocked. 

 

List of top e-wallet companies

 

Apple Pay

 

Apple Pay is a mobile payment system and electronic wallet service introduced by Apple Incorporated in 2014. The service allows customers to pay for products and services using NFC at the point of transaction. Users must upload their payment information to Apple Wallet and undergo verification with the card issuer.

Some devices that support Apple Pay include the iPhone 6 and later models, iPad, Apple Watch, and the MacBook. Apple Pay is not limited to Apple-specific terminals as it works with any contactless payment system. One of the major positives of Apple Pay is the increased level of security it provides as it integrates both fingerprint recognition and face ID.

In addition, Apple promises not to share any card information across its cloud, meaning users would have to enter their card information into each device manually. Apple Pay Canada is one of the preferred payment methods in Canada. 

 

Google Pay

 

Google rolled out Android Pay in Canada in 2017 but later rebranded Android Pay and Google Wallet into a particular brand – Google Pay Canada. Google Pay manages your credit and debit cards digitally, thus purchasing things securely online or in-store using NFC technology.

Presently, all the major Canadian banks offer products that support Google Pay. It can be used in shops that offer “tap-to-pay” terminals or display the “Google Pay” symbols in the store. 

 

Samsung Pay

 

Samsung Pay is an application that enables consumers to use a virtual wallet on their smartphones to make purchases. Samsung Pay Canada prides itself on being the simpler, safer, and smarter way to pay. Samsung Pay is widely accepted as it also works on older magnetic stripe terminals, unlike Apple Pay and Google Pay.

In terms of safety, payment cannot be completed through Samsung Pay unless authorization is given through PIN, fingerprint, or iris scan. In addition, through the “Find My Mobile Service” feature, users can remotely delete information on the device if the phone is stolen or lost.

 

TD Wallet

 

TD Wallet is an e-wallet application available for download on Apple App Store and the Google Play Store. TD Wallet allows you to store loyalty cards, gift cards, and membership cards on your smartphone. Your information is secured through the use of a passcode or Touch ID depending on the smartphone.

However, TD Wallet does not currently offer the ability to initiate transactions using debit or credit cards as these cards cannot be added to the TD Wallet. 

 

Starbucks App

 

At Starbucks, the goal is to offer a seamless payment experience irrespective of how customers decide to pay. The Starbucks App provides users the quickest way to make payments and earn Stars through the Starbucks Rewards loyalty program. The app can also be used to locate the nearest Starbucks store, make orders, and use contactless payment.

Starbucks Rewards customers in Canada earn Stars by scanning their Starbucks app and then paying with a Starbucks Card, credit/debit cards, cash, or select mobile wallets. Members can also save credit/debit cards or a PayPal account directly in the Starbucks app. Thus, scanning to pay and earning Stars is achieved seamlessly in one step.

 

Fitbit Pay

 

Fitbit Pay is a mobile payment wallet offered by Fitbit Incorporated that enables users to make contactless payments at point-of-sale (PoS) using a supported Fitbit device. With Fitbit pay, you can access your cards anywhere, just from your wristwatch. In addition, you can add your multiple credit cards to Fitbit Pay.

However, debit cards are not currently supported by Fitbit in Canada.  

 

Garmin Pay

 

Garmin Pay is a contactless payment solution designed for people who are always on the move. They pride themselves as being fast, very secure and convenient. With Garmin Pay, purchases can be made quickly and effortlessly without your wallet or mobile device. In addition, your information is protected by using watch-specific card numbers and transaction codes each time a transaction is made. 

 

Masterpass Digital Wallet

 

Masterpass (also MasterCard wallet) is a digital payment service that allows you to check out faster by storing all of your payment and shipping information in one secure location. Masterpass digital wallet supports other credit, debit or prepaid cards asides Mastercard cards.

Shopping with Masterpass also offers benefits and incentives at your favorite retailers, thus saving you time and money.

 

Popular reasons for Canadians to Create an E-Wallet

 

Some Canadians have hesitated to switch to electronic wallets for a variety of reasons. While their fears may not be unfounded, the advantages of using digital wallets outweigh the disadvantages. Here are some reasons why Canadians should open an e-wallet.

 

Extra Security

 

Imagine the horror that comes with losing your physical wallet. Not only do you lose your money, but you also lose your cards, license, documents, etc. Besides the hassle that comes with canceling and signing up for new cards, losing your documents could also threaten your identity.

However, with digital wallets, authorization is needed either through passwords or biometrics to access your account, thus protecting your funds and other information. Also, tokenization occurs whenever a digital wallet is used to make transactions, which keeps your information safe.

 

Convenience

 

With digital wallets, many transactions can be done conveniently – online purchases, sending and receiving money, making payments, etc. You can check online or physical stores in minutes or even seconds by using your smartphone, computer, tablet, or even your smartwatch. This is what a physical wallet cannot provide. Also, there are fewer items to carry about when you use a digital wallet. 

 

Affiliate Programs, Incentives and Discounts

 

Many digital wallets offer affiliate programs, discounts, promotions and incentives.

 

Efficient organization

 

Electronic wallets can help you organize your credit cards, debit cards, loyalty cards, membership cards, and coupons, so you have it all in one place. Digital wallets can also help track your transactions, thus ensuring proper management of your finances. Some applications also allow you to organize payments by scheduling them. 

 

Quick and Easy

 

With your digital wallets, you do not need to search for cards or count cash to the last cent to make payments. Initiating transactions is as easy as tapping your device once or twice or placing your device close to the contactless terminal. It is effortless to use, much faster than credit cards or cash, thus making it an efficient choice at all times.

 

No cost

 

Most digital wallets are free to use, meaning that you can use multiple e-wallets simultaneously without worrying about maintenance fees and other costs.

 

Tips for the new E-Wallet User

 

Use Secure Network Connections:

 

Always be aware of the kind of networks you are connected to. It is important to be connected only to those networks you can trust. Avoid the use of public Wi-Fi networks. More secure Wi-Fi connections require passwords and are easily identified as “WPA or WPA2.” Highly-insecure Wi-Fi is wide-open for anyone to connect to and may be labeled a “WEP” connection.

 

Only install apps from sources you trust

 

Applications are not always what they appear to be. Sometimes, you could get more than you expected. For example, a free game might not be an app designed to collect personal data from you illegally. Reading the user ratings and reviews can provide clues about the app’s integrity.

 

Check your statements regularly

 

 Make it a point to check your wallet transactions just like you check your credit card bills. If there’s a fraudulent transaction, you will be able to spot it. Also, check every time you get an SMS on your phone regarding any transaction. 

 

Be very sure of details you reveal or who you disclose it to

 

Sensitive details like passwords, OTPs and PINs should be provided only if a trustworthy app asks. If you are not on a secure payment gateway or within the official app, you should never enter these details. Also, never reveal any detail over the phone, even if the person claims to be an official from a bank or a wallet provider.

 

Know who to contact if there are issues before one arises

 

Ensure that you understand the quickest way to resolve any issues that arise and who is responsible for any fraudulent activity on your account. Some common scenarios to consider include scenarios in which your phone is lost or stolen, an individual card stored in the wallet is lost or possible hacking of your account.

Frequently asked questions

What is an online payment?

Online payments are payments initiated over the internet for goods purchased or services rendered either online or offline. Common methods to facilitate this include digital wallet payments, online debit or credit card transactions or direct debits.

What is an electronic currency?

Electronic currency is a form of currency available only in electronic or digital form. They are also referred to as digital money, electronic money or cybercash because they are only accessible with computers or mobile phones. 

What is a digital wallet?

A digital wallet is an electronic application that stores all your payment details in one location. They can make it safer and simpler for you to make cashless purchases online and in-store. They can also connect with traditional bank accounts and store your credit and debit card information.

What is the best e-wallet?

There is no singular best electronic wallet. However, there are some wallets that are strongly recommended as they offer great security levels and can be easily accessed for our devices. The most popular ones are Google Pay, Apple Pay, PayPal and Samsung Pay. 

How do I add PayPal to Google Pay?

Adding your PayPal to Google Pay is very easy. When you are ready to checkout in Google products, click “add payment method”. On the screen that appears, enter your PayPal information and accept the terms. You are all set to use PayPal to checkout on YouTube, Google Pay and the Play Store. 

Conclusion

 

With the pace at which technology is moving, the success or failure of e-commerce is determined by how easy or not it is for transactions to be done. To this effect, digital wallets have come to stay. With convenience, organization, and security being the edge digital wallets have over physical wallets, it is recommended that Canadians get digital wallets. 

Big Piggyy

"Show me the MONEY!!!" – Jerry Maguire

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