Digital Wallet

What Is A Digital Wallet?

A digital wallet or e-wallet is a piece of software, an electronic device, or an online service that enables people or businesses to conduct electronic transactions.

Deeper Definition

A digital wallet is an electronic card that may be used on a phone or computer to make online purchases. It works in the same way as a credit or debit card does. To make payments, an individual’s digital wallet must be linked to their bank account.

You’ll need to enter your card details into the app or website of your choice if you wish to use a digital wallet. Your information is protected, and you will be able to use the wallet only after activating your device and authorizing its usage.

Digital wallets are safe because mobile payments are fully encrypted and tokenized. None of your actual card or account numbers are saved within the digital wallet. The security of the digital wallet is strong. Despite this, if the user’s information is not kept correctly, it can easily be hacked.

They are three types of digital wallets;

1. Closed wallet: The funds saved in a closed wallet can only perform transactions with the wallet’s issuer.

2. Semi-closed wallet: In a semi-closed wallet, users can conduct transactions at merchants and listed places.

3. Open wallet: Open wallets are issued by banks or institutions that have cooperated with banks. Users who have open wallets can utilize them for any transactions that a semi-closed wallet allows, including withdrawals from banks and ATMs and financial transfers.

Digital wallets can also often be used to store and trade cryptocurrencies, which can be received quickly from a friend and family nearby or in another country. Cryptocurrencies, a form of a digital wallet, can purchase goods from places where crypto is accepted as a form of payment.

To process the payment on a digital wallet, secure magnetic transmission, near field communication, or QR codes can be utilized. Payments with digital wallets are fast and secure.

Digital Wallet Example

Many technologies companies have their digital wallet; examples are Apple pay, Microsoft wallet, Samsung pay, Alipay, Mobikwik e.t.c.