Digital Wallets - An Introduction

• Posted on October 31, 2019

DIGITAL WALLETS – AN INTRODUCTION

Digital wallet – What is it?

A digital wallet, also known as an ‘E-wallet’ is an online electronic service mainly used on a computer or a smartphone by individuals to allow them to make electronic transactions. Digital wallets are generally used for purchasing products online and are a convenient method for shopping. But, most recently with the very popular rise of advanced technology, Banks also have incorporated this as a facility in their financial systems.

Money is usually deposited into the wallet of an individual before any transactions. In some cases, the customers directly link their bank accounts with their wallets and when in a transaction, the money is directly deducted through the customer’s bank account.

Besides this, users may have their personal identification documents such as Driver’s license, medical cards, etc. stored inside of their digital wallets. Digital wallets are thus useful not only for basic financial transactions, but also to authenticate the holder’s credentials.

This system is very popular in Japan, where it is known as wallet mobiles. Most of these digital wallets work with the help of a technology which is known as NFC (Near field Communication) which allows the holder of the wallet to transfer any data relating to finance or personal information wirelessly to another device provided it is within the range.

As mentioned earlier, this concept of digital wallets has been on the rise over the past few years and many companies have launched their digital wallet applications under various names including, PayPal, Apple Pay, Google pay, Samsung pay, Microsoft wallet and the most prominent Indian digital wallet app, Paytm.

All this technological advancement has brought a shift to the traditional methods of banking and finance and has likely replaced payment through debit and credit cards.

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Let us now look at some convincing reasons as to WHY SHOULD YOU USE DIGITAL WALLETS:

1. Convenience – Now, with the help of digital wallets, one can complete a transaction within a matter of seconds.
2. Organization – Digital wallets help one organize everything from credit cards, debit cards, membership cards and so on.
3. Security – Mobile wallets offer you additional security in terms that only you, the owner can access your cards unlike in the case of physical wallets where once someone gets it, your cards are just there to take, but if someone finds your phone, they can’t merely reach for your cards digitally.
4. Discounts and bonuses – digital wallets often send promotions and point rewards which one access the information at a glance!
5. Costs – Digital wallets usually offer all this convenience for free. However, there are some flat fees for certain services.

Apart from these advantages, there are SOME INTERESTING FACTS to enlighten you more ABOUT DIGITAL WALLETS:

• China is ranked as being the top user of digital wallets with 47% of its population using the digital wallets facility followed by Norway (42%), and UK (24%)
• WeChat Pay been ranked as the leading mobile payment platform of the world with over 600 million users worldwide, followed by ALIPAY, with over 400 million users worldwide. PAYPAL is ranked third with 210 million users
• 64% of mobile payment users started to use payment facilities since last year.   
• 39% of mobile users use mobile wallet applications including but not limited to Apple/Android/Samsung Pay
• 5% of these users make payments once a week or more using a pay service.

BANKS AND WALLETS

When one compares the app feature list of a digital wallet app to the mobile banking app, they find that mobile banking apps are a lot more comprehensive. Here is a list of the features that are commonly present in a mobile banking app:

1. One can check their account balance.
2. People can transfer money from person to person or between individual and organization
3. An individual can transfer money between accounts.
4. One can schedule payments
5. Can navigate through GPS to find ATMs nearby
6. Notifications related to account usage.
7. Personal finance management — opening and closing of deposit accounts and trading.

We at Bankquality.com believe in sharing and learning from each other’s experiences. If you want to know more about choosing the best digital wallet service, click here and read reviews by people based on their experiences and make an informed choice while deciding what’s best suited for you!