Everything You Should Know About Digital Wallets / E-Wallets
Everything You Should Know About Digital Wallets / E-Wallets

The elevation in technology has changed the way of performing transactions. The technologies have stamped out the old methods of executing transactions with cash. Mobile phones have now taken the place of cheques, debit and credit cards, etc. in a smart manner. With the inception of digital wallets, people have replaced the usage of cash with mobile payment applications for performing everyday transactions. These applications allow smart, fast, and secure payments via digital wallets or UPI.

The number of users that use mobile payments apps is continuously growing each day, as it is the safest and fastest way to make payments easily. The mobile payment market is expected to grow by $11.83 trillion in 2028. With such a huge market value, it brings the fact that the scope and future of such applications are really exciting and that depends on the features that you offer.

Before discussing the advantages and features of a digital wallet, one needs to have a clear understanding of what a digital wallet is. Let’s get started.

What is Digital Wallet:

A digital wallet or e-wallet is an electronic payment system that works through the application being downloaded on a smartphone. It allows users to store bank account and credit card information. A user can start making payments through an e-wallet when the account is set up properly.

Digital wallets provide a secure, and reliable way to make payments electronically. These wallet applications provide a great alternative to credit card and cash payments. Combinedly, the digital wallet is a digital version of a physical or traditional wallet.

Examples of such best-known wallets are:

a. Amazon Pay

b. Android Pay

c. Apple Pay

d. Bitcoin Wallet

e. Google Wallet

f. MasterPass

g. PayPal One Touch

h. Samsung Pay

i. Visa Checkout

How do Digital Wallets Work?

Digital wallets use Near Field Communication (NFC) technology to ensure a secure transaction. NFC is a short-range wireless connectivity technology that enables the communication between different devices when they’re brought together, within a few centimeters of each other. NFC works like an intermediary between the smartphone and a compatible payment terminal.

A digital wallet is linked to a credit card or bank account information, and when a transaction is made these wallets link that connected bank information to the vendor. The actual banking information or card numbers are not stored in the app or on the device, also the information is not shared with merchants or vendors. The mobile payment application assigns a unique different virtual account number or token, to your card with each transaction. The real card values are never shared with the merchant.

Benefits of A Digital Wallet:

There is a reason why e-Wallet applications are gaining popularity all over the world. Some of the benefits have been discussed below, take a look-

a. Digital wallets are secured as they offer password protection. The user must enter a password to complete the transaction. Such password or biometric authentication process ensures that no other person is performing transactions from your digital wallet.

b. Electronic Wallets run without any minimum balance. You can add whatever amount you want to add to the wallet. Also, no penalty or deduction will be charged when there is a low balance or no balance at all in the wallet.

c. Digital wallets process any transaction within seconds. These applications are very easy to use, covering a touchy UI/UX with interactive features and amazing responsiveness and completing a transaction quickly.

d. The wallet applications do not levy any cost for using the application. A user can use the application as long as there is a requirement and can quit the app whenever desired. No hidden or additional cost is applied.

e. One of the benefits of mobile payment applications is that a user can perform all types of online applications such as paying the bills of gas, electricity, mobile, etc. Users can perform transactions by adding a mobile number or scanning QR codes.

f. Another big advantage of digital applications is that a user can make transactions from anywhere. The mobile payment applications only require a smartphone, a stable internet connection, and a linked bank account.

Features of A Digital Wallet:

Digital Wallets carry uncountable features that make them market favorite. From easy to complex features, an e-wallet depends on the user’s requirements. Following are some features discussed that need to exist in a feature-rich digital payment application.

1. Ease of Use & Flawless Transaction:

Mobile wallet processes a payment smoother and easier than ever. The application saves your information for authentication and offers seamless and secure transactions.

2. An Interactive and Smooth UI/UX Design:

UI/UX design plays a crucial real in user engagement. An attractive payment application design appeals to the user and establishes interaction and popularity. UI/UX design is a vital part of the mobile app development process to create a user-friendly application.

3. QR-enabled Technology:

e-Wallets need to utilize QR technology to make payments easier. Users can easily scan any QR code to make transactions conveniently.

4. Simplified Payment Process:

Users can make payments for electricity, mobile phone, and gas bills easily with their digital wallets. One can use e-Wallets to book train, flight tickets, and other services also. Users also get the option of auto-payment or alerts for timely transactions.

5. Cloud-Based Technology:

Cloud technology ensures a quick transaction in a secure manner. This technology provides a full suite of compatibilities that transforms smartphones into digital wallets.

6. GPS Tracking & Navigation:

e-Wallets provide GPS tracking & navigation functionality that allows users or businesses to accept information no matter where they are. GPS tracking and navigation is one of the crucial features for payment applications.

7. Wearable Device Integration:

Wearable technology is not limited to fitness trackers only, but can be the next logical and innovative step for mobile payments. Some statistics mention that wearable payments will grow from $3 billion in 2015 to about $700 billion by this year.

8. Spending Analysis:

Spending analysis is a must-have tool for mobile wallet applications. This allows users to examine their spending and encourages them to plan their expenditures. This feature can also be expanded with BI tools and predictive analysis.

9. Privacy & Security:

An e-Wallet application stores card information and password information. It becomes the utmost priority to secure the data, so mobile app developers need to develop an application with features like OTP, fingerprint, or any other authentication method to make a secure payment.

Uses of a Digital Wallet

Though a payment application is able to transact most of the payments, a number of such use cases is given below that can be done from a digital wallet application and that too without any effort-

a. Bill payments for electricity, gas/cylinder, mobile bills, etc.

b. Travel bookings for flights, trains, hotels, etc.

c. E-commerce transactions

d. Payment at Point of Sale

e. Transferring funds to another account or bank account

f. Foreign remittances under some guidelines

g. Buy subscriptions

Final Thoughts:

Digital payment applications are unconditionally safe and secure to make payments and transfer funds. Thanks to top-notch technologies and well-programmed payment gateways, all of the information stored in the wallet are kept secured and transactions are encrypted to avoid any external attack. Mobile app development companies focus on developing secure and feature-rich payment applications.

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