Chances are you’ve already heard of eWallets, but do you know what they are and how they really work? This guide explains all the information you need to know about modern electronic wallets – what they are, how they work, the benefits, why they are used and more.
How eWallets Work
An eWallet is a digital financial account platform which allows you to send and receive money electronically. The eWallet holds any monetary funds that you deposit, and you can then use these funds to pay for whatever you want to (subject to the merchant’s acceptance).
eWallets have been introduced to make payments quicker, more secure and more convenient. We all know the frustration of reaching an online checkout and then having a lengthy payment process to complete, and many of us are understandably wary of scattering payment card details across the web with many different merchants. eWallets help to avoid these issues.
In many ways, eWallets offer the same benefits and conveniences as well-known online payment merchants. However, eWallet companies have been keen to differentiate themselves from these online giants, for example: 02 mobile wallet and Starbucks wallet.
– eWallets let you store private information securely, such as banking information or shopping information.
– Many platforms allow you to use the eWallet solution from a smartphone app, and in conjunction with contactless payment technology, meaning you can also pay for things in-store using the app with an NFC enabled smartphone and not your wallet.
Different eWallet platforms come with different intended purposes and restrictions in how you can make payments and transfers. For example some platforms are linked to contactless payment technology while others aren’t.
– Online merchant platforms – many online merchants offer their own eWallets so frequent customers can pay more easily, though these platforms are mostly limited to the merchant’s site.
– Banking platforms – a number of banks will soon be offering eWallet platforms, and these will make a big difference to modern banking.
– Independent platforms – lots of independent eWallet companies are emerging, offering free platforms with multiple currencies, worldwide payment acceptance and fraud protection.
Using an eWallet
eWallets are loaded with financial deposits from a source of your choice. Most eWallets come with a range of deposit options, so wherever your money is you will be able to fund your account, usually without transaction fees. Deposit options include debit cards, credit cards, local and international bank transfers and transfers from other merchant websites. The same flexibility applies to making withdrawals also. You can take money from the eWallet and transfer it to bank accounts, payment cards and online merchants.
eWallets provide the advantage of quick and convenient online payment system at an online checkout, without the need to re-enter the same information over and over again, and without the need of storing sensitive information across multiple merchant sites. Consumers often abandon paying for a product online with their card details because of confusion and frustration, but eWallets make the process last for only a few clicks, benefiting both the customer with convenience and the merchant with higher sales and a better customer impression.
Most good platforms come with support for multiple currencies and making payments across the world. Strong payment acceptance makes these platforms suitable for company owners, employees and freelancers. They naturally keep your details safe with encryption and respond to threats with fraud protection.
eWallets are also proving very useful for parents who want to provide their children with pocket money. You can set up an ‘administrator’s’ account and then create subaccounts for family members, and spending can be controlled with payment limits and similar restrictions. Subaccounts are a great way of managing the finances of many different people all from one place.
In conjunction with apps and contactless payments, some eWallet platforms allow you to pay for general purchases at participating retail locations with your smartphone. You don’t need your wallet or any physical cards to pay.
There are many different eWallet service platforms currently available, and many new platforms are in the pipeline with banks and large brands thanks to development from the major financial transaction service companies. These are definitely the platforms to watch in the future.
This article was written by finance blogger Ben.
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