How does e-wallet work?

The world is heading towards unlocking new technologies. After the pandemic, companies have started using contactless payment methods even more. People now also prefer to pay online instead of going to the stores. Life is going so fast that no one has time to visit stores and buy what they want. Now people check online websites and pay using online wallets.

But why choose this method? Because it is convenient for everyone and secure too. You just need to link it to your bank account and enjoy the perks of shopping from home. Isn’t it amazing? A safe, hassle-free and stress-free way to shop and send/receive money that could change your life. Want to know more about this exceptional payment idea? That is known as an e-wallet. Keep reading.

What is an e-wallet?

Electronic wallet or Digital wallet is taking over the world. This secure and safe online transaction method has revolutionized the industry. It is like an online version of your physical wallet. From online shopping to bill payments, send or receive money to view payment history; nothing left that you can’t do with digital wallets.

Now you can do as much shopping as you can in just a click. Because you can pay using your e-wallet. Basically an e-wallet is your payment management app, which is password protected. So only you can access it and have control on all the transactions.

Why is e-wallet preferred?

The hype of e-wallet is due to its demand by the merchants and customers. Why physically visit the stores and purchase items, when everything is shifted towards the online system? Most of the merchants allow online payment options. Because they are secure and safe. Similarly, customers prefer e-wallets because you just need to add your credit/debit card details to the e-wallet and enjoy shopping.

Other than this you can send and receive money too.  E-wallets offer coupons, gift cards, event tickets and membership too. Who doesn’t want to enjoy so many perks for free? If you don’t have an e-wallet, you can have one now.  E-wallet is great for both retailers and customers in many ways.

• Hassle free shopping and checkout process along with a list of different payment methods, increases the sale. Therefore, it is beneficial for both the traders and also brings ease to the customers.
• No fear of any fraud or scam. So the e-wallet cuts down the cost of fraud claims and chargebacks. Retailers prefer it because of large turnout and customers also feel satisfied.
• According to research, in 2020 2.6 billion people are using e-wallets globally. This logistics is expected to double by 2025. So customers also adopt digital wallets because of safety and fast response.

How does an e-wallet work?

To make an e-wallet account, download the app and fill in all the necessary information. To use it, you can enter username and PIN/ fingerprint to unlock your e-wallet account. Want to buy something? Just purchase it in clicks. How? Proceed to the checkout process and select your e-wallet from the payment methods to pay online. It will hardly take a minute to send the amount.

But how are all these transactions possible? How is money transferred online? Following are the technologies that are used to make everything possible for you.

Near Field Communication(NFC)

For contactless payments, NFC is being used everywhere in the world. It is a secure data transfer technology that uses signals for data transmission. The electromagnetic signals enable the transmission of payment data from smartphones/smart devices to card reader and then the end terminal where payment is received.

But both the devices should be physically present near each other like within a premises of inch. All of this process takes only just seconds and it is fully safe. That’s why this is one of the secure techniques. Also there is no need of any physical contact and you can send and receive money online. Checkout can only be possible with this technology, if the retailer has a compatible card reader.

Magnetic Secure Transmission (MST)

This technology makes the smart devices to transmit the encrypted signal. Those encrypted signals are like swiping magnetic stripe on the credit/debit card. E-wallets with MST technology enable the transmission of encrypted payment data from smartphone to card reader. But the device should be held in a range of a few centimeters.

MST allows retailer and shopper to share the data without any upgradation and inconvenience. This technology is mostly available at the stores and you have to tap your mobile or card on a reader to pay directly.

QR Codes

QR codes are the matrix barcodes that read the data in the form of black & white pattern. It is scanned using mobile phone cameras or the scanning system of e-wallet. Scanning will start the data transmission. QRs are used for many purposes but in the case of e-wallet, these are used for payment.

Like you have scanned the QR code through your e-wallet, it means you send your payment information to card reader. That will then route to the payment processor, so the specific bank starts the purchase process. For example, you have PayPal app, and you are paying using it. A QR code will be generated that helps you to complete your purchase using the app.

Due to technology, everyone is adopting fast and secure payment methods. E-wallet are fast and secure, why not have one?

How to choose an e-wallet?

More than 40% of the customers are shifted to e-wallets. And there are a variety of different options of digital wallets available worldwide. But how to choose and which one to use? Every e-wallet has its own characteristics and benefits. So you can choose according to your requirements.

Apple Pay

A secure app that provides contactless payment to users of iOS, iPadOS and watchOS. It is secure in a way that if you made a payment using Apple pay, you have to verify it using faceID or passcode.

Google Wallet

Google Pay and google wallet are different apps. Google Wallet is better option because it uses the NFC technology, so it is password protected.

Samsung Pay

Samsung also has NFC technology that transfers data to NFC payment terminal. But the limitation of Samsung Pay is that it’s only compatible with Samsung devices.

PayPal

From e-commerce to online shopping, in person purchases to money transfer for personal uses; PayPal is jack of all. It is one of the oldest and still popular money transfer apps that also connect with other banks or apps to transfer money. PayPal one touch and Venmo are the extension and subsidiaries of successful PayPal business.

CashApp

CashApp is a peer to peer platform that let you send and receive money using smartphone. Other features of this app include buying Bitcoin and shares.

There are many other options too. But most people are into these globally used apps. Most of the retailers are converted to these online payment methods. While some still doesn’t support online payment options.

Final words

When it comes to accessibility, flexibility, security and convenience; e-wallets always win the race. Now you don’t need a different platform to do tasks like send, receive money, bill payments and purchases. Just open your e-wallet and enjoy shopping in just clicks.

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