When store, pre-paid, charge, debit, and credit cards were introduced, it changed the payment space. However, the era of plastic payment cards is likely to end as consumers are now opting for digital wallets and payments for various transactions like subscriptions, top mobile casinos canada, shopping, paying bills, etc.
In new markets that are primarily unbanked, low barriers to financial services and information, mobile network and internet infrastructure development, and high growth of the smartphone development rate have facilitated the transition from physical monies like cash to digital wallets.
While there is a bit of reluctance when it comes to switching, the improvement in speed and convenience, and the current generation slowly adapting to the digital era, there has been a significant boost in the adoption of digital wallets.
In this era of debit/credit cards vs. digital wallets, who will win the game?
What Is A Digital Wallet?
Also known as e-wallets, digital wallets are a software-based payment system that stores the payment information and passwords of the user that are used for various payment methods.
With the help of the e-wallet, you can make purchases quickly and easily with near-field communications technology.
In most cases, these options are often used in conjunction with mobile payment methods, which allow customers to pay for their purchases with their smartphone devices. An e-wallet can also be used to store digital coupons and card information.
How Do Digital Wallets Work?
Before we dive into the conveniences of e-wallets, let us first understand how do digital wallets work. Typically, a digital wallet will ask you to register for the service by adding your card information.
This information is then verified after an OTP authentication process. Once done, the registration process is concluded.
For certain services like Apple Pay, you may not have to go through the registration process; all you need to do is add your debit/credit cards. After you have set up your wallet, you can use it to make contactless payments. Here is a breakdown of the dynamics behind the concept.
- Once you see the contactless payment symbol at the POS, you need to bring your device close to the payment terminal.
- Using the NFC technology, both devices will communicate with one another.
- You need to tap on the required button to confirm and complete the transaction; alternatively, you may also have to enter a password, depending on the type of wallet you use.
- Do not remove your smartphone device from over the terminal until the payment is made.
What Are Some Features Of A Digital Wallet?
Most popular digital wallets have some common features like:
1. Verified Merchant Payment Processors
Most e-wallets enable companies and businesses to accept payments in multiple ways, primarily through debit and/or credit cards.
The merchant account will establish an agreement between the merchant acquiring bank and the acceptor for accepting payment card transactions.
With technologies like contactless NFC and QR scans, transferring money and making payments without any human intervention is now possible.
2. Quick And Easy Consumer Bill Payment Processing
One of the most striking features of digital wallet systems is that you can make instant payments. You can take care of flight tickets, electricity bills, mobile recharges, and even loan EMIs. Additionally, these wallets also have an auto-payment feature, and bill alerts to not have to pay a surcharge for late payments.
3. Fast and Straightforward Registration Process
You can easily register and start using digital wallets without having to pay any hidden charges or fees.
All you have to do is download and install the app on your smartphone. Next, you can sign up using your email address or your mobile number and confirm the registration with an OTP.
Next, you need to link the wallet with your debit/credit card and make payments using the app.
4. Friendly Interface
Most of these wallets have a user-friendly dashboard and interface so that users can keep track of their finances and payments.
The wallets will allow you to access reports of the finances, add money to the wallet, access in-app features, and check balance anytime.
Some also have the feature of setting up limits on monthly expenditures right from the dashboard.
Benefits of Digital Wallets
If you have not yet experienced digital wallets contactless payments and curious to know more about it, here are some known benefits:
1. Increased Visibility And Transparency
Digital wallets have handed the power back to the consumers. There is no longer need for paper-based expense management systems.
With the help of e-wallets, you can now see all your expenses listed on your screen in real-time. This means that you now have better visibility on your daily expenditure.
2. Better Customer Security
Any digital wallet you use will feature enhanced security protocols, which is very important since we have many cybersecurity risks.
The best form of security if you want to access digital wallets is two-factor authentication (2FA). When enabled, the 2FA system will create a second security barrier that fraudsters will have to overcome to access your account.
The numbered code is provided by the digital wallet to you and keeps changing every 60 seconds.
3. Reduced Transaction Fees
One of the best benefits of using digital wallets is the reduced transaction fee. Since consumers use the e-wallet for a specific retailer or merchant, the accounts do not face the interchange fees that are mostly imposed by other accounts by significant payment networks.
4. Rewards For Loyal Customers
Another significant benefit of using any digital wallet is that you have the opportunity to win rewards, especially first-time and loyal customers.
First-time users are provided with incentives and rewards so that they come back for a second purchase.
On the other hand, regular customers can sign up for loyalty rewards for using their wallets and are often provided with exclusive discounts. Additionally, the customer data obtained from the wallets makes it easier for the digital wallet company to tailor the rewards based on the consumer’s preferences.
Cryptocurrency is a type of digital currency that has gained a lot of popularity lately. Since cryptocurrency is virtual, you will require electronic wallets to access them. Or else you would not be able to manage these funds.
Thankfully, there are many best digital wallets for cryptocurrency that you can use. Apart from helping you store your crypto coins, you can also use them to make various forms of mobile payments.
Additionally, there are different types of cryptocurrency wallets as well.
The digital wallet markets are evolving as time passes. While not many people are comfortable using this mode of payment, it is likely that digital wallets are the future of payments and making transactions. Technological advancements in this field will ensure that this is the desired outcome.
Would you add anything? Let us know in the comments!
Arthur Rowley is a freelance writer. He mainly specializes in technology and the game industry. Arthur likes everything to do with technology and video games. He looks into the future of technology and is very excited about its daily metamorphosis and hopes in the great future for what lies behind the curtain of technological development.