What is an e-wallet?
An e-wallet or a digital wallet helps you manage and store your payment information in a secure manner. Gone are the days when making payment involves lengthy tedious processes for large amounts or carrying petty cash for day-to-day transactions; now all the payments can be made with a few clicks. No need of entering bank details or saving or waiting, just send the money from your wallet by entering your unique PIN to any person or merchant or pay bill.
Importance of e-wallet
Transitioning into complete digital payments or cashless payments, e-wallet has evolved to be a very handy yet secure way to add money for transactions. Such as:
- Reducing the risk of fraud or any other security threats
- No need to carry the right amount of cash or coins for daily transactions
- Can send money to your friends and family in any part of the world
- In short it is a faster, simpler, secure and
Types of e-wallets
There are different types of digital wallets each catering to different user and preferences. They are:
- Mobile wallets: Apps designed for smartphones for easy payments such as Bajaj Pay, Google Pay, Paytm and Apple Pay.
- Online wallets: Web based wallets are those that can be accessed on a computer or mobile device such as PayPal and Skrill.
- Closed wallets: Wallets that are associated with a particular merchant or service provider.
- Open wallets: Unlike closed wallets, open wallets are those through which you can pay to any merchant or service provider.
How a digital wallet works?
Storing your information:
You enter your credit card, debit card, or bank account details into the digital wallet app.
The app securely encrypts this information and stores it on your device or in the cloud (depending on the wallet).
Your actual card numbers are never shared with merchants or stored on your device itself.
Making payments:
When you want to pay with your digital wallet, you open the app and select the payment method you want to use.
The app generates a unique token, a temporary code that stands in for your actual card number.
This token is transmitted to the payment terminal using near-field communication (NFC) or other secure methods.
The merchant's payment processor verifies the token with your card issuer and completes the transaction.
You don't need to enter your PIN or card details for most transactions, making it faster and more convenient.
Additional features:
Many digital wallets also let you store other items like boarding passes, event tickets, coupons, and loyalty cards.
You can use some wallets to send and receive money to friends and family.
Some wallets offer budgeting tools and transaction tracking features.
Security:
Digital wallets use multiple layers of security to protect your information, including encryption, tokenisation, and biometric authentication.
Most wallets require a PIN or fingerprint scan to access the app and make payments.
If you lose your phone, you can usually remotely disable your digital wallet to prevent unauthorised use.
Age requirements for using a digital wallet
Most digital wallets require users to be at least 18 years old. This aligns with the legal age of majority in many countries and allows them to enter into financial contracts independently.
How does using an e-wallet benefit your customers?
Convenience:
Contactless payments: Pay quickly and easily without needing your physical wallet or cash.
Multiple payment methods: Store multiple credit cards, debit cards, and bank accounts in one place.
Fast checkout: Skip long checkout lines and pay with a tap or click.
Bill splitting: Easily split bills with friends and family.
Send and receive money: Send and receive money instantly to friends and family.
Security:
Encrypted information: Your payment information is stored securely with multiple layers of encryption.
Tokenisation: Secure tokens are used instead of actual card numbers during transactions, reducing the risk of fraud.
Biometric authentication: Secure access with fingerprint or facial recognition.
Lost phone protection: Remotely disable your e-wallet if your phone is lost or stolen.
