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FCA. (2024, July). Call for information: Big tech and digital wallets.
Digital wallet use has grown rapidly in the UK over the last few years. British authorities recently estimated more than half of UK adults now use one.1
This article includes tips, suggestions, and general information. We recommend that you always do your own research and consider getting independent tax, financial, and legal advice before making any important decision.
This article will address what a digital wallet is and how it works, followed by a close look at how to strengthen digital wallet security to prevent cyberattacks.
A digital wallet is an app that allows people to store payment information and make transactions directly from a phone or computer, offering the benefits of convenience, accessibility, and security.
Digital wallets make paying prompt and easy with quick taps or clicks — no need to carry or handle cash or cards. In addition to making it easy to send and receive money on the go, digital wallets can be safe, with advanced security features such as encryption and biometrics.
A lot goes on behind the scenes of a digital wallet to deliver its many benefits. Digital wallets work by:
Digital wallet technology is progressing fast. Ongoing developments are anticipated that will offer even more efficient ways to pay, get paid, and transfer money.
The growing adoption of this technology means it’s more important than ever to keep digital wallets safe from cyberattacks. The following steps can help digital wallet security.
One easy way to improve security is to set a strong password. It's recommended to choose a complex password that combines capital and lowercase letters, numbers, and special characters and to avoid using birthdays, family names, and even pet names.
It's also wise to change passwords regularly to reduce the risk of unauthorised access and to never use the same password across multiple accounts.
Turning on authentication adds another layer of protection. Security features like two-factor authentication and biometric scans (fingerprint or facial recognition) are good examples of authentication features offered by digital devices.
Linking a digital wallet to an authentication app generates a unique code that's needed for each login. This simply involves going to the settings within the digital wallet app, navigating to the privacy and security section, and activating it.
Users may want to avoid performing digital wallet transactions over public Wi-Fi networks.
Hackers can access data on public Wi-Fi by exploiting weak security protocols to intercept unencrypted data or deploy fake Wi-Fi networks. These fake networks may then mimic legitimate hotspots and trick people into connecting and revealing sensitive information.
Using a secure, private connection or a VPN can help reduce the risk of financial fraud.
Digital wallet users are encouraged to keep a close eye on their wallet transaction history. Regular monitoring may help identify unauthorised activity and protect users from online fraud.
Anyone who spots an unusual transaction on their account during these regular checks should immediately contact their bank and credit card issuers to report it.
If the mobile device containing the digital wallet is lost or stolen, its owner should remotely deactivate it and notify the digital wallet provider immediately. Quick action may help prevent misuse or theft.
To possibly further prevent unauthorised access, freeze any linked bank accounts and contact credit card providers to make them aware that a phone containing account details has been lost.
Digital wallets and social media do not go hand in hand. When a social media account is hacked, it could lead to unauthorised access to personal and financial information.
To help reduce potential security vulnerabilities, such as phishing or account theft, users should avoid linking their digital wallets to social media accounts.
Choosing a long-standing digital wallet provider is another way to stay secure. PayPal has worked hard on digital payments for more than 20 years, with technology that makes financial services and commerce convenient, affordable, and secure.
As a globally trusted platform, PayPal provides strong digital wallet security, widespread availability in the UK and abroad, and straightforward shopping and money transfers.
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