Despite the fact that we have reached a new stage in the development of man—the Cyberage—we are still largely dependent on our wallets. Just think about it – do you ever leave your home without your wallet, knowing that you will not need it (and still be able to do the groceries)? Well, with the rapid advancement of technologies in the matter, we will soon be able to shop using our mobile phones.
Cash is steadily becoming obsolete, and online money is already here to replace it. To be honest, I still wonder whether having an online wallet really makes things that much easier. So, I decided to do my homework and check the advantages and disadvantages of online wallets.
But first, let me explain what an online wallet is. Online wallets are compatible with laptops, tablets and mobile phones and, generally, all they need to operate is Internet connectivity. Some wallets can store several coins (similar to currencies) at once. Accounts are accessed via a username and password.
Pros of Online wallets:
1. They are convenient
Online wallets basically store all your payment information, which completely eliminates the need to carry a physical wallet. Digital wallets are becoming more and more popular and even the U.S. Government has become interested in them. Thus, you can now pay for admission to your favorite national park via your phone. But that is not all you can do with your digital wallet – you can also pay your babysitter, play at an online casino, pay a friend back, with Skrill being the best online wallet provider for this option, etc.
Two years ago, I went shopping with one of my credit cards that had reached its limit; you can imagine how embarrassing it was. On the other hand, using an online wallet lets you keep track of all of your credit cards and bank accounts in one place; apps like Neteller even provide quick and easy access to your the balance in all of your credit cards. No more embarrassing accidents, I would say.
Also, I am a fan of online casinos and I find both Skrill and Neteller very convenient for this purpose. To be honest, there are not many alternatives having in mind how many casinos accept PayPal deposits (almost none).
What is more, unlike real wallets, online wallets cannot be lost. No further explanation needed on this one.
2. They are (largely) safe
Using an online wallet is actually safer than using a credit card. Why? Because each service has a security extra layer. For example, to use Google Wallet you are required to enter a four-digital code whereas PayPal will want you to enter your username and password. Additionally, to use Apple Play, you need a passcode or a fingerprint. And you thought your four-digit credit card code provided enough security.
What is more, if you lose your cash or your credit card, you practically lose your money, right? Well, if you create an online wallet you will no longer need to carry cash. But that is not all: even if you lose your phone, for example—the device you use in lieu of a wallet—you will not necessarily lose all your money.
Additionally, one of the most important advantages of online wallets is the fact that your shopping habits will not be shared with any third parties. Amazing, right?
Cons of Online wallets
1. Security breaches are possible
Since you will be transmitting all your data via the Internet, hackers might get a hold of your personal information. Nevertheless, after having calculated all risks, I should say that using an online wallet provides no greater risk than using a credit card.
2. Dead battery = no wallet
While it is true that phone batteries have improved greatly in the past several years, the average phone battery still lasts no more than 48 hours. And if you are using your phone both for calls and as a wallet, you might just run out of battery at an unexpected moment. And, sadly, as soon as your battery dies, your wallet will become inaccessible.
3. Spending excessively
As you know, people tend to spend more money when they are using credit cards because credit cards change the way they perceive money. Well, an online wallet might make you want to spend even more money, as you will not even have to actually open your wallet.
4. Limited usage
In order to use the near-field communication device (NFC) on your mobile phone, you have to make purchases from a retailer supplied with a POS terminal. But those, as you might think, those are not largely available yet. Which means that in addition to your online wallet, you also need your real wallet in order to be able to make traditional purchases. On top of this, not all phones have NFC functions yet.