A digital wallet or eWallet is a software service accessed through a web application that enables you to store money and make payments in an instant.
They can be used like a traditional wallet to store your drivers licence, tickets, offers and rewards and cash in multiple currencies. Unlike your traditional wallet they don’t make you look like you have a strange lump in your pocket as you fill it up with paper receipts and vouchers that you can never find.
Digital wallets can be very sophisticated enabling you to handle multiple sub-accounts and to make payments while shopping online or in store at the point of sale (POS).
They can connect to multiple payment gateways and are ultra secure especially when payments are made digital wallet to digital wallet. Inter-wallet payments made from person to person (P2P) or person to merchant (P2M) happen in an instant.
Why you need a digital wallet
As a consumer or merchant a digital wallet (eWallet) provides:
- Instant Money Transfer
- Better money management
- Lower transaction fees
Security: Sophisticated security is very important in that the eWallet can be configured to be used in a particular country preventing its fraudulent use by cyber criminals. While registering for a digital wallet account customers and merchants are taken through strict electronic identity verification, anti-money laundering and know your customer (KYC) rules.
Instant payments: There are many instances in our business and personal lives in which instant money transfer is essential or at least highly desirable. This is a major benefit of a digital wallet. While in many instances domestic bank transfers are instant, it is not always guaranteed. This could be the difference between closing a deal or sending essential funds to a loved one. In some instances, banks can hold on to funds for a couple of days.
Better Money Management: Having multiple sub-accounts provides for better money management with each sub-account able to hold funds in different currencies. Depending on requirements the digital wallet can be used to help you take advantage of vouchers and rewards and to help with budgeting and payment reconciliation.
Lower transactions fees: Digital wallets can save consumers and retailers a fortune in the cost of making an economic transaction. When buying goods or services or foreign exchange there will be transaction cost in addition to the price of the goods you purchase. The transaction cost is usually financial although it could be time related with delayed payments which add to extra inconvenience.
Privacy: Digital wallets provide a degree of privacy over financial transactions where the payments made may be of a personal nature. Privacy may be required for many legitimate reasons over and above the ones that you might be thinking of now. It could be as simple as the purchase of a gift or sealing a deal with a confidential money transfer.