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The Science Survey

We've got the news down to a science!

The Science Survey

We've got the news down to a science!

The Science Survey

A Semi-Cashless Future

Digital wallets allow for seamless transactions, but do they mean the elimination of cash?
According to Capital One Shopping Research, in 2022, there were 3.4 billion digital wallet users in the world, which is42.6% of the global population. (Photo Credit: Clay Banks / Unsplash)

The world is at our fingertips. This phrase takes on a literal meaning in the era of digital wallets. With just a tap on your smartphone and confirmation through touch or Face ID, any financial transaction can be made and processed in seconds. Digital wallets store your card information on your personal electronic device and are ready for use at any moment, as long as you have the electronic device. 

People are no longer confined to physical wallets bulging with cards and cash, and fumbling to find the correct card or right amount of cash. You can pay at the cash register with just a tap of your phone on a reader. Whether it’s splitting large bills, reimbursing a friend, forgetting to bring cash, or making online purchases, the simplicity and speed of digital wallet payments have redefined how we interact with money on a daily basis. Apple Pay®, Google Pay™, PayPal, Zelle, and many other platforms are slowly taking over traditional financial transactions.

Other than spending money easily, digital wallets offer functionalities like expense tracking, budgeting tools, and investment management, empowering users with real-time insights into their financial status.

Digital wallets have seamlessly integrated programs such as reward points and cashback that are instantly credited and easily redeemable. The Apple Card is a credit card created by Apple Inc. that offers up to 3% Daily Cashback on purchases with no fees. It can be added to the Wallet App on Apple devices for payment (Apple Pay). In addition, whether it is for movies, concerts, or public transportation, digital wallets are simplifying ticketing processes. It allows users to book, store, and even share tickets all in one place, like adding tickets from TicketMaster to the Wallet App on Apple devices.

The Wallet app on Apple phones allows you to add Debit/Credit cards, transit cards, driver’s licenses, or State ID (for Arizona, Colorado, Georgia, Maryland), and other passes. You can apply for an Apple card and add it to your own Apple account, and any cashback goes directly into Apple Cash. (Photo Credit: CardMapr.nl / Unsplash)

There are three types of digital wallets. Closed wallets are only used to make transactions with the issuer business only, for instance, Walmart Pay and Starbucks Reward. Semi-closed wallets allow transactions at selected merchants and can easily transfer money from one individual/store to another. One example is Zelle, where you can easily scan or pay at a store, but you cannot withdraw money from Zelle. Open wallets are issued by banks and allow for all transactions of semi-closed wallets, as well as funds withdrawal and transfer. Two examples of open wallets are Apple Pay and Google Pay.

Digital wallets were already on the rise starting in 2016, but they started to reach their climax in 2022. According to Capital One Shopping Research, digital wallets led in online purchases globally and were involved in 49% of transactions in 2022. By 2022, 92% of consumers adopted the use of digital wallets, as other countries like India with 90.4%, China with 84.4%, and the U.S. with 49.9% followed. This fast transformation from paper to digital can have contrasting views and effects within our society.

Older generations are not accustomed to the rapidly growing technological advances of our age. It’s consequently much easier for them to fall victim to scams that result in them mistakenly losing all their financial savings,” said Hannah Ren ’24.

Scammers are targeting seniors because of their lack of knowledge about this new technology. Digital wallet scams exploit vulnerabilities in digital payment systems to steal money or sensitive information from unsuspecting users. These scams can take various forms, such as phishing attacks, fake websites or mobile apps, identity theft, and malware-infected transactions. It is too easy to transfer any type of information nowadays.

Some people use digital wallets, while some still prefer the traditional cash method. Ren said, “I primarily use cash, because I prefer the security of a tangible source of currency. I don’t think digital wallets are safe. Having so much money at the control of a simple click of a button makes it much more liable to being stolen.”

However, Nicole Zhen ’25 said, “A digital wallet is more convenient for me because I don’t have to bring cash, just my phone. I think it’s safe because people can’t steal money from me, since I don’t have cash when I’m outside. They could steal my phone, but it would be difficult to access my money there.”

Security is a crucial question that is on the minds of many consumers. The digital wallet uses a key security element called “tokenization,” where the 16-digit card number is replaced by a randomly generated token number that the retailer receives. This secures your card information when a data breach occurs because the hackers will take hold of the token number and not your card information. 

Despite this method of securing consumer information, software bugs, device malfunctions, and scams can have an impact on digital wallets and allow hackers and cybercriminals to gain access to your digital wallet or steal your personal and financial information. Thus, it is critical to exercise caution and to take precautions to safeguard your information when using your digital wallet payment methods.

One way to manage your digital wallet is to use a complex password with a mix of upper and lower case letters, numbers, and symbols and avoid common words or guessable combinations for your account. Some apps also allow you to enable 2FA (two-factor authentication) for your login. It is a second verification form in which you receive a text message or an app notification after you put in the password to verify that you are the one logging into the account. Biometric authentication, such as fingerprint and facial recognition, offers a highly secure and convenient way to protect digital wallets as well. Regularly updating your software is recommended because updates often fix patches and bugs that hackers could easily exploit. 

At the end of the day, always take caution when you are online and guard your personal information safely. It is possible by following some of the tips here. Avoid suspicious e-mails and links, and do not insert your personal information such as your name, address, phone number, or social security number. Look for red flags such as misspellings, long awkward phrasings, generic greetings, and urgent or threatening language telling you to take immediate action. Verify the sender’s e-mail address and avoid clicking on any links, downloading attachments, or scanning QR codes from unknown or untrustworthy sources. Use a secure, private Wi-Fi network or a VPN when accessing your digital wallet to ensure the highest level of security. Most importantly, set up alerts for all transactions and review them frequently.

I have already transitioned over to a digital wallet with all my cards; however, I still carry around a wallet just in case a store doesn’t have Tap and Pay or other methods of digital payment, but also because school and school bus IDs are still needed to swipe in and out. 

One phone is sufficient to do just about anything in this era now. I use it to pay for groceries, to pay at restaurants and shops, and to scan my concert tickets. Many others like me are able to walk out of their homes with just their phones and enjoy the day without having to carry a heavy wallet. 

That is essentially the life of people in China with their super app, which includes a wide range of services such as gaming, shopping, transportation, and payments. WeChat began as a chat service, but now its users can perform online shopping, make payments, access entertainment streams, and even arrange doctor appointments, all on one platform. Another example is Alipay, which began as a payment platform but has since expanded to include utility bill payments, financial services, and trip booking, making it an indispensable tool for millions.

However, with such ease of payment, this leads to overspending and wasting your intangible finances, since everything is just a tap away. One lesson to take away is that what we make out of the digital wallet comes down to how cautious and responsible we are with it. The control is in our hands.

Some people use digital wallets, while some still prefer the traditional cash method. Hannah Ren ’24 said, “I primarily use cash, because I prefer the security of a tangible source of currency. I don’t think digital wallets are safe. Having so much money at the control of a simple click of a button makes it much more liable to being stolen.”

About the Contributor
Ella Zheng, Staff Reporter
Ella Zheng is a Managing and Advisory Manager and Instagram Editor for ‘The Science Survey.’ She finds passion in writing stories that inform, educate, and entertain the public. Ella finds the field of journalism to be especially appealing because of its ability to show what is happening on the other side of the world. Outside of school, Ella can be found playing table tennis, volunteering, crocheting, or hanging out with friends. She is interested in the field of environmental engineering and marketing. Through the communication and writing skills that she has developed in the Journalism class, Ella hopes to use these skills in her future career and in supporting her community.