Hey, Nicole, do you have cash?
Nicole says, oh no, I don’t!
Money in the past used to live in purses, pockets, envelopes, under pillows and the most hilarious of it all, under the soil.
But currently, our money now lives on screens, and that’s why when Nicole was asked if she had cash. She said No.
Apparently, Nicole had saved all her money in a digital wallet and a bank account.
What is a digital wallet?
A digital wallet is an app on your phone that lets you store and use your money digitally. Instead of carrying cash, ATM cards and loyalty cards, You have it all contained in your phone.
With a digital wallet, you can send money to friends instantly, receive money quickly and pay for subscriptions and online shopping. It is designed for speed and convenience.
Leading examples of digital wallets in Nigeria are Paga, Chipper Cash, KongaPay, Firstmonie Wallet, PocketApp, Google Wallet, and eNaira Speed Wallet.
The red flag for most digital wallets is, they are built for movement not long term storage.
Most digital wallets don’t store large amounts of money long-term.
Instead of carrying cash, ATM cards and loyalty cards, You have it all contained in your phone.
With a digital wallet, you can send money to friends instantly, receive money quickly and pay for subscriptions and online shopping. It is designed for speed and convenience.
Leading examples of digital wallets in Nigeria are Paga, Chipper Cash, KongaPay, Firstmonie Wallet, PocketApp, Google Wallet, and eNaira Speed Wallet.
The red flag for most digital wallets is, they are built for movement not long term storage.
Most digital wallets don’t store large amounts of money long-term.
How to open a digital wallet
These are the steps you can apply to open a digital wallet.
Preparation
Before you begin, make sure you have the things ready. You will need a working phone number, access to the Internet, and your personal details such as your full name, date of birth and Bank Verification Number (BVN). Having all these requirements ready will make the process quicker and smoother.
Download the App
If you are using an Android phone, go tqo Google Playstore or the Apple App Store if you are using an iPhone. Search for a trusted fintech app like Paga, Chipper Cash, KongaPay, or Firstmonie Wallet.
Once you find your preferred app, download and install the official version on your phone.
Initial sign-up
Open the app and tap on SIGN UP or CREATE AN ACCOUNT tab. Enter your phone number, then wait for a One-Time Password (OTP) to be sent to you via SMS.
Type in the OTP to confirm your number and continue with the registration process.
Provide personal detail
At this point, you will need to fill in your personal details. This includes your full name (exactly as it appears on your BVN), your date of birth, and your email address.
You will also be asked to create 4 or 6 transaction digit PIN. This pin is very important because it will be used to approve payments and transfers.
In some cases, you may be asked to upload a clear selfie or a profile picture to verify your identity.
Verify BVN and upgrade account
You need to enter your BVN so the app can confirm your identity with the central banking system. At first, your account may be on a basic level with lower transaction limits.
To enjoy higher limits, you can upgrade your account by providing additional details such as your National Identification Number (NIN).
Fund your wallet
Once your account is set up, you will receive a wallet account number. You can move forward to add money to your wallet in different ways.
Set up security
For your safety, enable extra security features such as fingerprint or Face ID for quick and secure access. Always keep your account details private. Never share your PIN or OTP with anyone, no matter what.
What is a bank account?
A bank account is a secure place where your money is stored and managed by a bank. It is more structured and more stable.
You can save money, receive salaries or allowances, withdraw cash from ATMs, and transfer money with a bank account.
How to open a bank account
Visit a Bank Near You
Go to any bank branch close to you. Walk into the banking hall and let the customer service staff know that you would like to open an account. They will guide you on what to do next.
Request and fill the account opening form
You will be given a form to fill. Provide your correct personal details, such as your full name, date of birth, phone number, and home address. Make sure everything you write is accurate to avoid any issues later.
Provide required documents
You will need to submit some important documents like your National ID, Voter’s Card, Passport, Bank Verification Number (BVN) and a recent passport photograph. All these are for verification purposes.
Some banks may also ask for proof of address.
Complete verification (KYC)
The bank will verify your details to confirm your identity. This process is known as Know Your Customer (KYC). Once your details are confirmed, your account will be created.
Deposit money into your account
After your account is opened, you may need to deposit a small amount of money to activate it. This can be done right at the bank counter.
Receive your account details
You will be given your account number, which you can use to receive money. Some banks may also give you a debit card immediately, while others may ask you to come back later to collect it.
Set up security and access
You may be asked to create a PIN for your debit card and register for mobile or internet banking. Always keep your details safe and never share your PIN with anyone.
Key Differences Between Digital Wallets and Bank Accounts.
A digital wallet and a bank account are both ways to manage your money, but they are not the same thing.
- Purpose
Digital Wallets are basically used for spending, sending and quick payments.
Bank Accounts are primarily for saving, storing, and long-term use.
- Accessibility
Digital wallets: Everywhere you go with your phone, it is accessible.
Bank accounts: It can only be accessed through apps, ATMs, or banks.
- Speed
Digital Wallets are very fast with instant payments.
Bank Accounts are more formal, and slightly slower.
- Cash Access
Digital Wallets are limited to access.
Bank Accounts are easy access to physical cash.
- Interest (Growth)
Digital Wallets rarely grows your money.
Some bank accounts help your money grow. But, not all banks.
Security measures and funds protection
Security measures applied to digital wallets are different from the ones applied to bank accounts.
Digital wallets use pins, fingerprints, and face recognition. Bank accounts use secure banking systems, verification processes, and official regulations.
Both are very safe, only if you are careful. Never share your pin, passwords, and OTP codes.
Your safety is not just technology, it’s also your habits.
A major concern of many is Fund Protection. Are you sure my money is safe?
A bank account is usually protected by strong regulations, and protections. If something goes wrong, there are systems in place to help you recover your money.
A digital wallet is also secure, but the level of protection varies depending on the app. This is a very big flag for many people.
That’s why you shouldn’t keep all your money in a wallet. Ensure you use strong passwords and security features.
Can digital wallets replace bank accounts?
Digital wallets cannot completely replace bank accounts. A digital wallet can support your financial life but it cannot entirely replace the role of a bank account.
Without a bank account, you may struggle with receiving salaries and handling large transactions.
No, digital wallets cannot replace bank accounts, instead they complement each other.
It is also important to note that digital wallets are widely accepted but not everywhere. Some societies prefer cash and bank transfers. Having both gives you freedom.
Money is currently beyond a means of exchange you hold. You can now manage money across spaces, and across tools like digital wallets and bank accounts. A digital wallet is about ease, while a bank account is about security.
