Credit card fraud is on the rise in the US, and the statistics are frightening. In 2023, more than a quarter of US adults were victims of credit card fraud. In 2024, credit card fraud was the most widely reported online scam, and by the first quarter of 2025, 151,000 reports of fraud had been made.
If credit cards are no longer safe, what are the alternatives? Mobile wallets and digital payments are the future, and for good reason. Get ready to discover how mobile wallets stack up against traditional cards in terms of safety, usability, and future relevance.
Security Differences Between Mobile Wallets and Cards
When using a credit or debit card to make a purchase, the card number and expiry date are exposed, allowing for easy copying of the details. The only security a card has is the CVV and the user’s signature. If a card is lost or stolen, it needs to be deactivated and replaced.
Mobile wallets like Apple Pay and Google Pay use those same cards but protect them with tokenization and encryption. This means that the card numbers are replaced with unique tokens, which change every transaction, thereby limiting the card’s exposure. Security is higher, as access to these payment systems requires PINs and often biometric signatures, such as face or fingerprint scans. If a phone is lost or stolen, it can be remotely disabled, preventing anyone from accessing the data stored on it.
However, unlike physical cards, digital wallets rely on device compatibility and internet access, which can limit their use in certain scenarios.
Encryption and Fraud Protection in Apple Pay and Google Pay
Beyond general security, Apple Pay and Google Pay have slightly different methods for protecting consumers’ card details.
Apple never provides the card details to the merchant; instead, it stores encrypted device account numbers on a chip in the device and uses those. Apple Pay uses two-factor authentication (2FA) via the user’s unique Apple ID.
Google Pay is cloud-based and relies on a virtual account number and dynamic security codes. Google uses machine learning systems to identify suspicious activity on its users’ cards.
Both platforms require authentication before each transaction and have the latest, robust fraud detection systems in place.
Fintechs Combining Systems: Revolut, Wise, PayPal
The world’s three leading fintechs are also digital wallets, each with its own unique approach to handling customers’ funds and card details. Each can hold users’ money in various currencies until it’s required.
Revolut
Revolut operates as a digital bank but doesn’t hold its customers’ funds in its own accounts; instead, they’re stored in secure accounts with partner banks. The Financial Conduct Authority (FCA) in the UK oversees Revolut and protects customers in the unlikely event that Revolut faces financial trouble.
Customers in eligible countries have access to Revolut’s debit Visa card, available in both physical and digital formats, providing an additional payment service. This card can be linked to Apple Pay and Google Pay.
If any fraudulent activity is suspected with a Revolut card, it can be frozen with one touch via the app. Its crypto wallet has encrypted private keys for additional security.
Wise
Wise is primarily an international money-transfer wallet that also holds customers’ funds in custodial accounts in various global financial institutions. Regulatory oversight is provided by the FCA (UK), FinCEN (US), and other authorities in emerging markets.
Like Revolut, Wise offers a debit card in select markets, which is managed by Mastercard and can be used wherever the Mastercard symbol is displayed. The physical card can be used to withdraw cash from ATMs.
Wise offers cross-device flexibility, allowing seamless use across smartphones, desktops, and tablets.
PayPal
PayPal isn’t a bank; it’s a digital payment platform that links to its clients’ bank accounts and credit cards. It holds its customers’ funds in wallets, and the money is pooled together in custodial accounts. PayPal is regulated as a money services business and is overseen by the Financial Conduct Authority (FCA) in the UK and the Financial Crimes Enforcement Network (FinCEN) in the US.
Security-wise, PayPal offers two-factor authentication (2FA), encryption, strong fraud protection, and buyer protection programs.
Consumer Trends Toward Mobile-First Payments
Due to the speed of transactions, combined with heavy encryption and tokenization, mobile-first payments are gaining popularity. In the US, 65% of adults have a digital wallet, and 39% of all e-commerce sales are made via this technology, compared with 33% using credit cards. These statistics highlight the gradual decline of cards and the growing adoption of digital wallets.
The younger generations, aged 18–35, are already favoring this technology, as it goes far beyond a generic payment platform. For example, digital wallets often automatically link to cashback offers and loyalty points. Digital wallets offer banking facilities for the underbanked, and some trusted PayPal casinos even allow players to deposit funds directly from their digital wallets.
The Future of Digital Wallets
Digital wallets are being transformed into super apps that manage payments, P2P transfers, budgeting, crypto trading, and loyalty rewards. The lifestyle appeal will attract more customers, especially those in Generation Z and Alpha. Experts predict that digital wallets will become the primary form of payment, with credit and debit cards serving as a backup. Businesses that don’t accept payment this way will run the risk of losing customers, so they need to get on board rapidly.
Credit and debit cards are still relied on as backup options, in the case of a low-battery smartphone or Wi-Fi access restrictions. In the future, though, they’ll be the exception to the rule and not the dominant payment systems that they once were.