How to Keep Your Digital Wallets Safe? Best Practices to Ensure Financial Safety

Digital wallets are becoming increasingly popular, predicted to grow from 3.4 billion users in 2022 to 5.2 billion in 2026. These apps skyrocketed during the Covid-19 pandemic reducing the need for fiat currency and catalyzing virtual monetary flow.

Unfortunately, this grabbed the attention of cybercriminals aiming to exploit the new technology. Understanding digital wallet security issues and cyber threats will help you to apply adequate cybersecurity solutions to protect your finances. Here's what you can do to ensure the safety of your online wallet.

What is Digital Wallet Hacking?

Digital Wallets are software applications that allow online financial transactions via smartphones, laptops, and computers. If you see a person pay by tapping a smartphone to the register, they use a digital wallet, also called an e-wallet. Some e-wallets allow operations with cryptocurrencies alongside the governmentally approved currency.

There are a few ways criminals profit from digital wallet hacking. Firstly, they can extract funds if they gain unauthorized access. A standard scenario is transferring money to an untraceable third-party account or buying gift cards for money laundering. However, digital wallet accounts can also be used for impersonation, using them to verify criminal purchases with a stolen identity or take out a fraudulent loan.

How to Secure Your Digital Wallet?

Just like you wouldn't leave a physical wallet unattended in a bar, you shouldn't forget about the digital one. Although e-wallets were designed to increase user comfort, they don't do that at the expense of security. Here's where to start.

1. Passcode Management

A unique, user-generated passcode protects E-wallet transfers. This is the first defense barricade. Do not use easy-to-guess passcodes like your phone number's last four digits, birthday, home address, etc. Do not use the same passcode for your e-wallet and smartphone; if they allow exceeding four digits, you should utilize this option instead.

We recommend using a professional password manager if you want to ensure all online account safety. Use it to secure an e-wallet with a long and complex password stored in an encrypted vault protected from data leaks. More so, a password manager auto-fills them on request protecting the device from keyloggers and spyware.

2. Dark Web Monitoring

Hackers often sell stolen credit card or e-wallet details on illegal virtual black markets. Instead of emptying your account of whatever is there, they can use it for more malicious scams, like credit card fraud. Many mistakenly think they are safe if their e-wallet doesn't hold more than a few hundred bucks. Learning that the stolen identity was used to take several fraudulent loans is an unpleasant surprise.

Subscribing to an Identity Theft Protection software is best if you do a lot of online shopping. It will scan the Internet for personal data leaks, like a username-password combination, credit card number, first and last name, etc. In other words, it will look for any information that could be used for malicious purposes and alert the user to take immediate action.

3. Phishing Protection

Phishing is one of the most popular methods of gaining unauthorized access to digital wallets or other online accounts. A few Metaverse enthusiasts in the US learned it the hard way when their virtual land purchases were stolen after clicking on a phishing backlink.

Most popular phishing scams involve fake mirror websites. For example, a hacker could direct you to a page perfectly identical to your e-wallet login page, but any input data is captured and sent to the criminal. It's essential to refrain from clicking backlinks from unverified sources, like online chat rooms, forums, and emails. Carefully inspect the backlink destination and use real-time malware protection software to stay safe.

4. Multi-Factor Authentication (MFA)

MFA is one of the best ways to protect your digital funds from unauthorized access. This security method asks for additional verification steps before granting wallet access. For example, after inputting your username: password combination, it will send an SMS or an email with another code, ask a security question, or require biometric authentication.

Use MFA whenever possible because even if hackers obtain your login details from a data leak, they cannot overcome the second verification step. Furthermore, you can combine additional verification steps with a password manager to make your account immune to password-related hacking attacks.

Conclusion: Safe Browsing Habits

Additional cybersecurity software is paramount to protect your e-wallet, but no apps can protect you from careless browsing. Avoid shady websites like illegal online marketplaces or torrenting sites if you frequently shop online. We'd also recommend limiting sharing of personal information over social networks, as it can be used to improve phishing scams or impersonation. Cautious online browsing coupled with cybersecurity apps allows you to enjoy all the comfort of e-commerce without taking unnecessary risks.