What Are Digital Payment Wallets, and How Can I Use One?

If you own a smart device such as a smartphone, tablet, or smartwatch, you may have seen digital wallets advertised in the past which will enable you to settle payments at retailers or earn rewards by changing your shopping or spending habits.

How do payment wallets work?

Digital payment wallets are perhaps more known for their ability to facilitate payments through NFC (Near Field Communications) technology, which allows shoppers to wirelessly ‘tap’ their smart device on a payment terminal to complete a payment.

Digital wallets typically only work on smart devices that have NFC support – meaning that not all smartphone, smartwatch, or tablet models accommodate the feature. South African users can link their supported bank accounts (either their credit or debit card), which they can alternatively use when making payments.

In some cases, payment wallets also allow users to accrue rewards or rewards points when fulfilling certain actions – these can include rewards for shopping for certain items, at certain franchise stores, or by making different digital transactions.

Digital wallets generally require that users authenticate a transaction in the same manner that bank cards would – such as by using a PIN. However, smart devices, given their nature, can also require that users input their fingerprint, an iris scan, or by facial recognition.

There is no restriction on the number of payment wallets users can have – for example, users can have one digital wallet on their smartphone, and could use another from a completely different provider on their smartwatch.

What payment wallets are available in South Africa?

Samsung Pay

Samsung Pay was one of the first digital payment wallets available in South Africa and works on some of Samsung’s smartphone models as well as some of its smartwatches. Samsung Pay is supported by all major South African banks.

Fitbit Pay

Fitbit Pay, available on some of Fitbit’s fitness trackers, also allows customers to make payments while on-the-go. Notably, Fitbit Pay can only be used with an FNB banking account.

Garmin Pay

Similarly to Fitbit Pay, Garmin Pay launched in late 2018, and works across Garmin’s range of smartwatches. Customers can use Garmin Pay with FNB or RMB Private Bank accounts.

Apple Pay

Apple Pay launched in South Africa in 2021, and at present only works for customers banking with ABSA, Discovery Bank, and Nedbank, who support Visa credit and debit cards.

Do I pay extra to use a payment wallet?

Generally, customers don’t pay any additional fees when using a digital payment wallet linked to their smart device; meaning that the service is a free addition for South Africans with eligible bank accounts and supported cards.

Digital payment wallets make money by charging MasterCard or Visa a handling fee per transaction – meaning that customers themselves are not directly charged for their use.

However, enrolling in rewards programs or participating in other offers may mean that customers must pay an additional expense or settle a fee; be sure to read through any terms and conditions before taking part.

How can I safely use a payment wallet?

One area of concern that has been raised around the rise of payment wallets is that wallet operators – such as Samsung or Apple – do technically retain information on your purchase history. However, in most cases, this information is stored securely on your device rather than on the internet.

Secondly, as some payment wallets can be accessed directly from your device’s locked screen for convenience purposes, keeping your accounts secure is a priority. For that reason, ensuring that your wallet is only accessible when your phone is unlocked, having a secure lock method, and limiting the transactional amount on the wallet is vital to staying secure.

Lastly, be sure never to connect to an unsecured WiFi network, as your data may be accessed – rather use a recognized WiFi hotspot or network or use your mobile data connection.