Tips for keeping payment information on your smartphone secure.

Folks who ditch plastic cards and cash in favor of mobile wallets have less to carry around, but they need to understand the risks and how to keep payment information secure. Here are the basics of keeping mobile wallets safe.

Built-in mobile wallet security

Whether you carry cash, cards or a mobile wallet, there’s always a risk of loss or misuse. App-based mobile wallets, also called digital wallets, are designed with security features that make them safer in some ways. Google Pay, Apple Pay, Samsung Pay and others have security features like encryption that keeps data inaccessible to hackers and technology that only allows authorized use (like passwords and PINs, two-factor authentication and biometric authentication).

Risks of using digital wallets and how to minimize risk

If you’ve ever raced to complete a task on your smart phone before the battery dies you know the first risk of using a mobile wallet: no battery power means no buying power. Many folks carry a back-up card just in case. Physical cards are also useful at merchants that don’t have point-of-sale systems that accept contactless payment.

Another risk of using a mobile wallet is that if your phone is lost or stolen your financial information could be at risk. However, most phones have a setting that allows the device to be erased remotely so others can’t access sensitive information.

Mobile wallet users should also be familiar with how their app handles fraud. “[F]raud monitoring and liability protections vary across providers,” Consumer Reports says. “Cash App, PayPal and Venmo say they monitor transactions for suspicious activity. Because they can hold funds in the app and transfer funds, they’re also legally required—under the Electronic Funds Transfer Act—to investigate and reimburse unauthorized transactions and errors.” However, Consumer Reports notes that Apple Wallet, Google Wallet and Samsung do not offer fraud protection themselves but rely on bank partners and card issuers to investigate and provide reimbursement for unauthorized transactions.

Another risk concerns privacy. Mobile wallets may not allow users to control which and how much user data is shared. If your mobile wallet allows it, opt out of data and location sharing. If the app itself doesn’t allow opting out, Androids and iPhones allow you to limit data sharing and opt out of location sharing in their settings.

And finally, funds held in mobile wallet apps may not be protected by FDIC or NCUA deposit insurance because the services are not regulated like banks. If the convenience of using a mobile app that doesn’t offer deposit insurance outweighs the risks, consider limiting funds on the app to what you need for a short period. Transfer any funds you receive in a mobile wallet to an insured savings account as quickly as you can.

More tips for keeping your mobile wallet safe

To keep your mobile wallet safe, take these precautions:

• Keep tabs on account activity by setting up alerts to monitor purchases, transfers and any suspicious transactions.
• If you suspect fraud, contact the card issuer immediately.
• Beware of any messages saying someone accidentally sent you money and asking you to return it; this is a common scam.
• Never share log-in credentials. Some scammers pose as financial institutions or government officials in an attempt to get your password and account information.
• Consider putting a limit on transaction amounts.
• Don’t link your mobile wallet to any social media platforms.
• Only use a mobile wallet app on secured wi-fi networks. Public wi-fi could be intercepted by hackers.
• Learn how to erase your phone remotely in case it is lost or stolen.

Federally Insured by the NCUA