3 Reasons to Ditch Your Leather Wallet and Go Digital

By Jared McClure

February 26, 2019   •   Fact checked by Dumb Little Man

how digital wallet works

Despite the cool factor, Americans have been slow to make the switch to digital wallets. As you might expect, younger consumers lead the way: Fifty-four percent of Gen Z consumers use digital wallets. Still, even though user numbers increased in all age groups in 2018, many are only dabbling in digital while holding on to their worn-out leather wallets.

What’s behind the reluctance? If you were paying attention to high school physics, you’ll remember that inertia is a powerful force.

A lot of it comes down to what we’re used to doing, and what we’re used to is handing over a plastic card. Scanning your phone or smartwatch instead is different, and human behavior is hard to change. Case in point: Only 31 percent of mobile payment users even remember to use their digital wallets when it’s an available option. It’s just not an automatic reflex at this point.

Changing How You Pay

digital payment options

In the not-too-distant past, credit and debit cards were the new payment methods out to replace the wad of cash or the checkbook in your pocket. Over time, credit cards gained acceptance by being convenient and offering financial incentives.

In the early days, card companies like American Express and Visa practically gave away money in an attempt to make their cards attractive to consumers — they offered a better deal than paying with cash.

The same thing is happening with digital payment options. People who try out Venmo get cash back, plus some more when they get someone else to try it. Apple Pay offers incentives like the Father’s Day promotion, which gives users a $20 credit for spending $100 in the Nike app. Other digital wallets offer free Google Play credits or will pay for some percentage of your purchase.

So far, one of the biggest shifts to automatic digital payment behavior is happening at Starbucks. If you’re a regular at the coffee chain, you probably pay for your flat white through the Starbucks app. The retailer is marrying its loyalty program with in-app purchasing and is upping the convenience and incentives for consumers to make digital payment a part of their coffee-buying routines.

Incentives work. But to make digital wallets the go-to payment method, the user experience will have to be better than anything else we have.

3 Reasons to Ditch Your Wallet

digital wallet

If you’re not exploring digital wallet options, you probably figure that if it ain’t broke, don’t fix it. However, the traditional wallet has some definite drawbacks that paying with your phone or smartwatch would solve — and then some.


Ever stand at the counter shuffling through your plastic cards looking for the one that will give you extra travel points for hardware purchases? Ever hear the heavy sighs from the people behind you in line? (Hey, at least you didn’t pull out your checkbook.)

A digital wallet retires the card shuffle. You can put as many different cards as you want in a digital wallet. Instead of shuffling, it’s a simple flick and tap to select the one you want. That’s it. The payment is complete. Instead of sighs and eye-rolls from your line mates, you’ll just get envious glances.

If you’re paying online, it’s even easier. No typing and then re-typing your card number and that annoying three-digit code. You simply tap the payment method in your digital wallet and hit submit.


Paying your credit card bill online seems instant. It’s not. Electronic payments, which typically process in overnight batches, can take up to three business days to post. When you go the old-fashioned route and mail a check to your credit card company, it’s even slower.

Wouldn’t it be nice to make payments in real time? With a digital wallet, there’s no confusion about what your balance is. Every transaction — no matter how you paid — is consolidated and available at your fingertips.


But is it safe? So many people’s resistance to digital wallets comes down to security concerns. According to a survey by the American Bankers Association, only 12 percent of consumers trust the security of digital payments over their traditional payment methods.

However, security is where digital wallets really outshine their analog alternative. When you hand your card to a waiter, do you really know what’s happening while he has it? Even when you swipe the card yourself, it’s dangerous: Hidden “skimmers” at gas station pumps can steal your information after you pay.

In contrast, when you make purchases using your digital wallet, your card number isn’t ever shared. Instead, your payment information is replaced with a unique token. Even if someone manages to skim the information, it can’t be used for transactions at other places.

As an added layer of security, digital wallets have multi-factor authentication. You have the phone or smartwatch, you know the PIN, and your face or fingerprint are recognized, making it difficult for anyone but you to authorize a purchase.

See Also: 13 Online Banking Security Tips You Should Know About

Here’s the bottom line: There are easier, faster, and safer ways to pay than handing over your credit card or a wad of cash. All you need to do is reach for your phone instead of your wallet.

Jared McClure

Jared McClure is the co-founder and COO of CrayPay, a free app that drives mobile payment adoption by offering to instantly pay a portion of every purchase made. During his 18-year career, Jared has provided leadership, vision, and management to ensure proper operational controls. His entrepreneurial background is manifested in his oversight of the company’s technological development, brand partnership strategy, and customer service. Prior to CrayPay, Jared was the co-founder and president of Transfer f

Getting Started with Money

Learn More About Money

More on Money

Money Individual Reviews