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The battle for your digital wallet heats up

What bank-enabled digital wallets mean for Fintech

What the war over your wallet means to you

“The pitch for consumers is an easier online checkout experience,” Rossman said. “You won’t need to enter all of your card information because it will already be saved in the system.

“And it will be managed by the banks, which will in theory have better fraud protection than retailers.”

The good news is “they are already a regulated sector,” added Pam Dixon, executive director of the World Privacy Forum, a nonprofit research group, in contrast to the equally popular buy now, pay later programs.

However, “consumers still have to be really careful,” Dixon cautioned. “This is your financial information.”

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But it is not without risk. Users are vulnerable to fraud or scams or can lose money if they accidentally send a payment to the wrong person, a Consumer Reports analysis found.

And peer-to-peer payments still have varying degrees of consumer protections, which could cause an issue when it comes to getting a refund.

Trying to get money back into your personal account after it’s been transferred to someone else may require more work compared to requesting a refund with a credit card company, which often reverses charges almost immediately and fights on your behalf. 

“It’s kind of like getting the toothpaste back in the tube,” Rossman said. 

‘Let the buyer beware’

If you have never used a digital wallet before, make sure you do a couple of test runs and do not send large amounts.

Pam Dixon

executive director of the World Privacy Forum

Contrary to those findings, “99.9% of the 5 billion transactions processed on the Zelle network in the past five years were sent without any report of fraud or scams,” the American Bankers Association, Bank Policy Institute, Consumer Bankers Association and The Clearing House said in a joint statement. 

And in every instance in which a customer disputes a transaction made via Zelle, banks are obligated under federal law to investigate and provide reimbursement if the transaction was unauthorized, the statement said.

For now, Dixon offers consumers this advice: “Let the buyer beware.”

“If you have never used a digital wallet before, make sure you do a couple of test runs and do not send large amounts.”

Also, adjust your privacy setting to minimize the amount of information that companies are collecting, Hand advised.

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