A typical mobile wallet is pretty much exactly how it sounds like—a “wallet” in your “mobile” that keeps your cash safe. Your smartphone nowadays has been synchronized to do many things including taking pictures, buying goods online, playing games, booking for movies, and currently acting as your physical wallet. So why not get one? Or rather if you’re carrying your phone everywhere with you, you’re definitely carrying it.
One of the most significant advantages of mobile wallets is that they eliminate the need to carry around fat wallets stashed with cash and multiple cards making one vulnerable to robbers. Mobile wallets are a suitable alternative to carrying cards, and petty cash and many Singaporeans consider them safer than any other method.
However, that does not mean that you transfer all the money to your mobile account. Mobile wallets are also not 100 percent safe either. In addition to that, there are multiple risks of overspending and impulse buying. Remember how the human brain works?–Spending more just because you have more. So how do you keep your digital funds managed and protected? Here’s how:
Limit the amount of money you hold in your mobile wallet
There are multiple reasons why you should cap the funds in your mobile wallet. Here are some of them.
There is the risk of identity theft.
In as much as mobile wallets are secure, nothing is impossible in the world of hacking. Hackers may find their way into it, and this may just be delayed by the fact that mobile wallets are relatively new in the digital world. If an individual gains access to your online funds, there may be no recourse on when the hacker accessed, stole, and spend every last dollar from the wallet.
They are not reliable for lost funds
In the event that your credit card got lost or was stolen, you could virtually dispute the charges with your bank and may only be partially liable. If someone accessed your mobile wallet, you might never get your funds back as many of them do not have similar contingencies as credit cards. Like we’ve mentioned, mobile banking is still new and has not acquired reinforced security features like conventional banking.
Risk of private companies vanishing
You have to keep in mind that private companies manage online mobile wallets. Most of these banks don’t know you physically unlike local banks which have almost every detail about you. What if that individual company went out of business suddenly? What if they close permanently without notice? Even if they promise to refund, you really have no way to know for sure whether you will receive the money back or not. Essentially, you have no way of knowing if even that process will be timely and accurate. Your mobile wallet may as well get wiped out entirely when the company closes.
Constant maintenance that leads to unreliability
Mobile money is managed online, that means that if the system fails for a few days, weeks or months, your money may be stuck in that account for that period until the systems are back. Therefore, if you had considered stashing all your money in the same account, you may be in for some trouble. There are always subsequent updates and system maintenance every once in a while. All these may at one-point inconvenience you when you need money urgently.
Risk of falling into scams
Unlike local banks, there is no sure way of knowing whether an online bank is a legitimate banking method or a scammer. Every day there are new mobile banking sites coming up, and some may just be pseudos looking for unsuspecting online bankers to steal from, that’s why you should only put a relatively small amount in your mobile banking.
What is the most appropriate amount to keep in your mobile wallet
No specific numerical amount of money is categorically correct to keep in your mobile wallet. However, there exist two fundamental principles when it comes to storing your money online.
Use a budget-focused allocation
You should not use the amount arbitrarily to put in the digital wallet. You should first begin by deciding what the function of the wallet will be. When you have gathered your financial status, you may go ahead and allocate a fixed amount for the expense. For instance, you have a budget of S$150 for your groceries each month. If you have decided that your mobile wallet will be keeping the money for groceries, then the amount should always be capped at S$150. This way the mobile wallet helps to limit your spending. However, if you keep more or less than this amount, you fail to maintain the purpose of the wallet.
Reset the mobile wallet at the end of the month
Before allocating more money for the next month, reset the wallet. If you spent only S$130 out of the initial S$150, the remaining S$20 should go back to your savings. Alternatively, you may simply top up with an S$130 and keep the rest in your savings account. Keep in mind that your mobile wallet is for helping you spend accordingly. Therefore, what you budgeted for is what should be in the wallet, nothing more or less.
Before deciding on the amount read the terms and conditions first
Before you decide to throw large lump sums of money in your mobile wallet, read the terms and conditions of the banking system. You could check stuff like how much the company is willing to pay back in case of a close down or in the event of identity theft (if any).
You should also pay attention to withdrawal fees and service fees. Some online money sites charge significantly higher amounts than others. This should give you transparency whether it’s worth keeping a lot of money in a particular account only to face problems with high transaction fees or refunds. If the system does not offer any protection, it’s recommended that you either look for a better mobile wallet or simply store an amount not more than S$150 or any amount you will face no difficulty parting with.
You may also like to read:
(By Molly Joshi)