The term 'Digital Wallet' is included in the Banking edition of the Financial Dictionary. Get your copy on Amazon in Kindle, Paperback or Audio edition. Check for lowest price here...
A digital wallet is an electronic type of device which makes it possible for individuals to complete financial transactions electronically. They are also called e-wallets. There are several useful applications for using this technology. Consumers can utilize them to buy thing over the Internet with a computer or laptop. They might also employ them to buy an item or service in a store by using their smart phone to complete the transaction. These electronic wallets can be linked up directly to the person’s bank account as well.
These phone versions of digital wallets could also contain a health card, driver’s license, loyalty memberships, and similar important identification documents. The technology permits these credentials to be transferred over to the terminal of the merchant wirelessly. The technology specifically is called NFC near field communication. More and more these days, these electronic wallets are being deployed to do more than conclude simple financial transactions. They also can verify the characteristics of the holder.
As an example, a digital wallet can be used to verify the buyer’s age in the store when they are there buying alcohol or cigarettes. In Japan, such systems have become increasingly more popular. People there call the electronic wallets “wallet mobiles.”
Another advantage to such digital wallets concerns their ability to remember more complicated passwords. The owners do not have to be worried about if they will be personally capable of remembering them when they need them. These wallets also have the advantage of cutting the need to have a physical wallet with them. Consumer data centers and companies love them because they make it easy for them to gather consumer data. Such information helps them to better understand the purchasing habits of customers. This makes it easier to appropriately market goods and services to them. Naturally consumers suffer a great breach of their privacy thanks to these e-wallets and the resulting consumer data collection practices.
The advantage for consumers is that these e-wallets can save them having to fill in various order forms on different websites whenever they perform an online purchase. This is because that data is pre-stored on the wallet and auto entered (and updated) to the appropriate order fields on all merchant sites thanks to the technology of the digital wallet. Statistics shows that individuals will abandon online purchases fully 25 percent of the time because they become frustrated in filling out the forms.
Both consumers and merchants each obtain advantages thanks to these e-wallets. Consumers gain the significant advantage of having all of their sensitive information electronically encrypted. This means that it is effectively protected utilizing a secret proprietary software code. Merchants obtain the advantage of gaining safety from fraud.
Two great advantages to these digital wallets are that they are free for individuals and they are not difficult to get. Examples of this ease in obtaining them abound. Customers can complete a purchase on the site of a merchant that is developed to process server side e-wallets. All the customers have to do is to type in their names, shipping address, and payment information directly to the form provided by the merchant. When the purchase is complete, the consumer has the choice to sign on to an e-wallet which they select by simply typing in a password and user name for any future needs and purchases. Users can also obtain such a wallet at the vending web site for e-wallets.
These wallets may be free for individuals to use, but the vendors make their money off of the merchants. There are vendors of these wallets which arrange deals with the various merchants to give the wallet vendor a certain set percentage on each purchase amount which runs through their wallets. There are other cases where the e-wallet vendors run the transactions between merchants who participate and cardholders. They do this in exchange for a flat fee.