Billed as the future of real-world payment technologies, the jumpstart of digital wallets or e-wallets have put real-world pressure on many retail outlets to embrace e-wallet payments. Unlike e-banking, e-wallets allow consumers to put a specified amount of cash directly on their phone to spend both online and in-store.

Unfortunately, the technology has met resistance. Common misconceptions about mobile wallet security and viability as a service have caused many retailers as well as consumers to become wary of using e-wallet payment services.

It’s true that anytime you broadcast data across a mobile or wireless network you’re accepting the risk of that data being intercepted. However, secure e-wallets make sure to utilize a number of security measures that have many tech experts viewing digital payments as safer and more efficient than physical payment.

1. Encryption Technology
   E-wallet payment providers make heavy use of modern encryption technology to enhance mobile wallet security. Many people fail to realize that we use encryption technology on a daily basis. Nearly every computing device from smartphones to desktops to tablets utilizes some level of encryption to keep consumer information safe. It does this by turning normal data or “plaintext” into a grouping of random characters or “ciphertext” that can only be read by those with a special key. The majority of companies use a 128-bit data encryption technology to secure their data.

   Is encryption really safe? The amount of time, computation cost, and patience to crack modern encryption algorithms make breaking an encryption without a key a near impossible task. That’s not to say that encryption doesn’t have vulnerabilities, typically referred to as backdoors. However, the likelihood of these types of digital backdoors working is minimal at best.

2. Password Protected
   The past few years have seen a dramatic shift in how and why consumers use their smartphones. Smart mobile devices connect people to their business and social networks as well as bank accounts, car insurance, medical databases, and even home operating systems. They are the life-blood for consumer day to day activities. To prevent access, smartphones employ a variety of mobile security measures. These include complex alphanumeric passwords as well as biometric protocols, such as fingerprint access and voice activation.

   E-wallets employ a similar method. Consumers can add an additional password protection to their e-wallet account. Combining that with advanced encryption methods further protects a consumer’s information from hackers and other third parties.

3. Acts as a Proxy
   Unlike credit cards, a secure e-wallet service will help conceal a consumer’s banking and private information. E-wallets only access the funds that a consumer makes available. This means that when a transaction is made, e-wallets do not access a consumer’s wider banking information to make payment and will not log metadata that can be captured by a third party. By acting as a proxy, e-wallets provide better mobile wallet security by preventing third parties from accessing information that can be used to commit fraud or identity theft.