What is a digital wallet and is it safe?

If you own a smartphone, you have access to a digital wallet — a tech-driven innovation that speeds your way through checkouts while keeping your payment information secure. And these mobile wallets aren't passing fads, either. In fact, research from J.D. Power found that nearly half of Americans had used a mobile wallet within the past three months.

But if you're still curious how these digital payment tools keep your money safe, read on.

A digital wallet is an app that stores your credit, debit and gift card information so you can make purchases with your mobile device. You can use digital wallet apps like Google Pay™, Samsung Pay™ or Apple Pay® on phones and smartwatches. The cards uploaded to your device will still have the same reward points and capabilities as your physical cards, so don't worry about being short-changed.

To make an in-store purchase, check for your digital wallet's logo at the point-of-sale (POS) system, open your wallet app, choose a card and then tap your device at the POS terminal. That's it, you're done.

In short, digital wallets are safe, offering multiple layers of protection for every transaction.

At the first level, each transaction made using a digital wallet is protected through a technology called tokenization. This process encodes your debit and credit card details so the numbers are never shared with a merchant. So if a retailer gets hacked, your credit or debit card number won't be compromised. This saves you the hassle of having to cancel your cards and get new account numbers in the event of a data breach.

At the next level, digital wallets have an additional layer of payment permission required when you want to make a transaction. Some wallets use biometric data like a fingerprint or facial recognition to confirm it's really you making the transaction.

Finally, digital wallet apps are designed to only interact with specific apps on your phone. This isolation can prevent malware that may affect other apps on your phone from infiltrating your wallet and stealing your financial information.

It's easy to set up a digital wallet and start using one for your day-to-day transactions. To demonstrate how simple the process is, here's how to add your Citizens' debit card to a digital wallet and make a transaction:

1. Choose your digital wallet app

   You can choose from your phone's native digital wallet or a third-party wallet app.

2. Add your card to your digital wallet

   Enter your card information into the app. You can enter card information manually or potentially take a photo of your card and the app will do the rest.

3. Use your digital wallet at checkout

   When shopping in-store, you'll open your app, select your Citizens' debit card and hold your phone close to the payment terminal or card reader. When prompted, you'll complete the security steps to finalize your payment.

   If you've enabled transaction alerts within your mobile app, you'll get a banner notification showing your recent purchase and amount.

Digital wallets put purchasing power in your pocket — even if you leave your wallet at home. However, they have drawbacks in some situations.

If you're considering making the leap to digital payments, you'll likely want to consider one of the top three phone-sponsored digital wallet apps: Apple Pay (iPhone devices), Google Pay (Android devices) and Samsung Pay.

According to Forbes, Google Pay is the most popular digital wallet, followed by Apple Pay and Samsung Pay. All of these apps empower you to store multiple cards, along with additional data like concert or event tickets, airline boarding passes and more. They all also offer multilayered security features to keep your payment information secure.

The one you choose will likely have a lot to do with your type of phone. The good news is that no matter which you choose, they're all accepted wherever you see the "contactless" symbol at checkout or on the payment terminal.

While digital wallets are inherently safe, you can take precautions to keep your payment information and device secure. The following four S's can help set you up for security and mobile banking success.

• Secure your phone and apps

  Always lock your phone and set up separate passwords for your digital wallet and mobile banking apps. If you use a swipe passcode, be discreet to prevent prying eyes from swiping your swipe.

• Skip the public Wi-Fi

  Only use secured networks to access your mobile banking apps.

• Set up extra security

  Whether it's a locator app or a function that lets you wipe your device if it's stolen or misplaced, use your phone's built-in security features.

• Stay on top of your accounts

  Set up transaction alerts and regularly review your account. These two steps can catch fraudulent charges and shut down fraudsters in a flash.

Losing your phone can feel like losing an integral part of your life. The good news is that if you provide your carrier with the IMEI or MEID number, it may be able to disable your smartphone and digital payment apps, blocking access to your personal information and sensitive data. Request written confirmation from your carrier that you reported the smartphone as missing and that the smartphone was disabled.

Report the theft to the police — including the make, model, serial number, and IMEI or MEID number in your report. Some service providers require proof that the smartphone was stolen; a police report can provide that documentation.

So, what is a digital wallet? It's a mobile technology that encrypts your debit and credit card payment information to make every transaction a faster and more secure experience. It's the perfect partner to your mobile banking app. And whether you use Apple Pay®, Samsung Pay™ or Google Pay®, a digital wallet means your Citizens debit¹ or credit card² is always at the ready with a powerful one-two punch: secure processing and zero liability protection with fast, one-touch purchasing.