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E-Wallet Comprehensive Guide: Why Digital Wallets Are Critical For Merchants?

Thursday, 16 Jun, 2022

Digital wallets are also known as electronic wallets (e-wallets), which are the waves of the future. They make both online and offline transactions a swift, efficient, and convenient process that’s beneficial for all parties involved. Merchants make quicker sales and customers waste less time. Let’s learn more about digital wallets, how they work, and how you can use them.

Digital wallets are the waves of the future.

Digital wallets are the waves of the future.

1. What is an e-wallet and how does it work?

1.1 - What is an electronic wallet (e-wallet)?

E-wallet meaning: E-wallet (also known as digital wallet) is a secure financial app or online web browser that allows you to:

- Make purchases with retailers on-site.

- Transfer or withdraw money: After topping up their accounts, customers can transfer funds to other users (Peer-to-Peer transfer) instantly via the service provider's internal network with cost-efficient fees.

Digital wallets allow you to store tickets.

Digital wallets allow you to store tickets.

- Store and track rewards programs:

Icon list Gift cards, membership cards, loyalty cards.

Icon list Coupons and vouchers.

Icon list Cloud coupons and promo codes.

Icon list Movie tickets, event tickets, plane tickets.

Icon list Hotel reservations.

- Make it easier to stay on top of your finances, since there are detailed records of every transaction.

A digital wallet needs to be linked with the individual’s bank account to make payments. To link your bank account, you need to set up your digital wallet first. Once you’ve got your digital wallet installed, you can use it to make online or contactless payments, and add boarding passes, store tickets and coupons, and much much more. Let’s get started.

For setting up a digital wallet, the user needs to install the software on
    his/her device.

For setting up a digital wallet, the user needs to install the software on his/her device.

Step 1: Download digital wallet app.

Step 2: Follow easy registration steps.

Step 3: Load your digital wallet.

Step 4: Link with your bank account or credit/debit cards.

Step 5: Enter your password or private key.

Step 6: Ready to pay.

While digital wallet and mobile wallet bear similar features, the digital wallet can be accessed on a wider range of devices, like a desktop, laptop, and mobile device, whereas the mobile wallet is exclusively accessible via your mobile device.

1.2 - How do e-wallets work?

QR codes

QR codes

Quick response codes are matrix barcodes that store information. You use your device’s camera and the digital wallet’s scanning system to initiate payment.

Near Field Communication (NFC)

Near Field Communication (NFC)

NFC is a technology that allows two smart devices to connect and transfer information using electromagnetic signals. It requires two devices to be within about an inch and a half (4 centimeters) from each other to connect.

Magnetic Secure Transmission (MST)

Magnetic Secure Transmission (MST)

The same technology used by magnetic card readers that read your card when you swipe it through a slot on a Point of Sale (POS). Your phone generates this encrypted field that the POS can read.

The card information you have stored in your digital wallet and choose to use for a transaction is transmitted from your device to the POS terminal, which is connected to payment processors. Then, through the processors, gateways, acquirers, or any other third parties involved in credit and debit card transactions, the payment is routed through the card networks and banks to make a payment.

1.3 - What is the best electronic wallet?

Apple Pay®, Google Pay®, and Samsung Pay® are the most popular digital
    wallets.

Apple Pay®, Google Pay®, and Samsung Pay® are the most popular digital wallets.

Apple Pay®, Google Pay®, and Samsung Pay® are three of the most secure and trusted digital wallets. Now is the perfect time to give the digital wallet a try.

Apple Pay

Payments with Apple Pay are verified using Touch or Face ID, so you can have maximum security with minimal effort.

Apple Pay

Google Pay

Google Pay uses NFC technology so you can pay with a fingerprint or a password, and your card information is always encrypted.

Google Pay

Samsung Pay

Samsung users can also set up Samsung Pay, another widely accepted electronic payment system equipped with MST and NFC technology.

Samsung Pay

In addition, there are lots of digital wallets out there currently available such as PayPal, Facebook Pay, Amazon Pay, etc.

2. How many types of e-wallets?

There are 3 types of digital wallets which are: closed digital wallets, semi-closed digital wallets, and open digital wallets.

How many types of e-wallets?

Digital wallets are divided into 3 types.

Closed digital wallets: are created by businesses that sell products or services to their customers, and can only be used to transfer funds between the user and wallet-issuer. A closed digital wallet enables users to make payments via an app or website. If a transaction is canceled or a refund is issued, the entire amount is stored in the wallet.

Semi-closed digital wallets: are for users making transactions at a given list of merchants. Semi-closed digital wallets have a limited coverage area. To accept payment from the semi-closed digital wallets, merchants must accept the contract or agreement with the issuer.

Open digital wallets: are issued by banks or their partners, and can be used for any type of transaction, including ATM withdrawals. Open digital wallets allow you to easily transfer funds. Payments can be made both online and in-store at any time. The open digital wallets service provider allows users to conduct transactions from anywhere in the world; however, both the sender and the receiver must have accounts on the same application.

3. What are e-wallet advantages and disadvantages for consumers?

3.1 - Benefits of digital wallet:

Security

Security

The problem with walking around with large amounts of cash is that if it’s stolen or lost, you’ll likely never get it back. While a thief could grab your wallet and get access to your credit cards in seconds, digital wallets encrypt your information to help safeguard it from hackers. Even if somebody steals your phone, the thief would likely still need a passcode or biometric authentication to access the information in your digital wallet.

Digital wallets are actually one of the best options to keep your information protected as digital wallets are based on encryption software. This means digital wallets don’t use your actual card number, but instead a token. Therefore, if your business ever experiences a cyberattack, your private information won’t get stolen.

Convenience

Convenience

In the digital era, a large majority of merchants accept digital transactions, and implement more plans to provide those services in the future. When paying via your digital wallet, you are able to complete transactions in an easier, faster, and more secure way.

Efficiency

Efficiency

Say goodbye to filling out tedious checkout fields while you shop online or fishing through your purse for your debit card. Your digital wallet will make your transactions seamless and simple.

It’s free

It’s free

A major digital wallet is typically already downloaded to your mobile device, or can be downloaded from the app store for free. Besides, making the switch from physical cards and cash comes at no cost to you. Most transactions via your digital wallet do not come with any associated fees.

3.2 - Drawbacks of digital wallets:

Digital wallets could encourage overspending.

The convenience of having easier access to your cards can be a downside. It means your impulse buying increases because you constantly have your digital wallet at your disposal.

Digital wallets encourage impulse buying.

Digital wallets encourage impulse buying.

There may be fees involved with a digital wallet.

Be sure to look into any potential fees when you start using a digital wallet. For example, withdrawal fees may occur when you withdraw funds out of your digital wallet to a local bank account.

4. Four digital wallet security you need to know.

Digital wallets are becoming an increasingly popular alternative to cash or credit/debit card to make payments. Digital wallets give you the freedom to make payments at retailers without carrying a physical wallet with you. It can be more secure than carrying cash or using a debit/credit card.

If you're on the fence about digital wallets, understanding their security features can help. Here are 4 ways digital wallet work to keep your account secure:

4-1. Tokenization protects your card information.

When you swipe a physical credit or debit card at the store, they log your card information in their system, including your name, card number, expiration date, and service code. While retailers do their best to protect this information after your transaction is complete, unfortunately, data breaches occasionally happen when retail systems are compromised.

A digital wallet alleviates some of this risk using a system called Tokenization. Whenever you make a purchase with a digital wallet, the digital wallet generates a unique, single-use payment code. Instead of providing your personal information, this “token” code is only relevant for the immediate transaction. Tokenization makes your data much more difficult to track and adds an extra layer of security to your payments.

4-2. Every protection your phone has, your digital wallet has.

If you lose your wallet, it’s time to cancel your cards. It’s stressful, frustrating, unbelievably inconvenient. While losing your phone is similarly inconvenient, it’s far more secure than your wallet for 3 reasons.

First, Apple®, Samsung®, and Google® all offer “Find My Phone” functions that allow you to easily locate your phone. According to a survey by Pixie in 2017, on average, Americans spend almost 2.5 days annually searching for lost items, including wallets. With a digital wallet, you can immediately secure your information and track your device more efficiently.

Digital wallets are far more secure than your wallet

Digital wallets are far more secure than your wallet.

Second, while your wallet is full of information right at the surface, your phone hides sensitive information behind layers of encryption. By having a passcode or fingerprint lock on your phone, your digital wallet becomes impressively more secure.

Third, digital wallets offer several tools to secure purchases, ranging from passcode to biometric verification. Your information becomes much more difficult to access when you have a fingerprint lock blocking the way.

4-3. Access from anywhere.

If you’ve lost your phone or it’s been stolen, you may be worried about someone bypassing the protections on your digital wallet. However, in the unlikely event that a stranger accesses your digital wallet, you can still prevent your data from being stolen. By logging in from another phone or device, you can freeze your digital wallet, preventing new purchases from going through.

4-4. Sandboxing.

It’s no secret that some malicious apps seek to take information from your phone, but digital wallets protect against this by using a practice called Sandboxing. Through this process, the digital wallet is isolated from the rest of your phone, so if something does go wrong with your phone, your digital wallet will remain separate and secure. The app only interacts with programs and apps within its “sandbox”.

5. New trends of digital wallets: smart wallets & super apps.

The EU eID Wallet allows the EU citizens and businesses to access services
    online without having to use private identification methods.

The EU eID Wallet allows the EU citizens and businesses to access services online without having to use private identification methods.

A smart digital wallet called The European Digital Identity Wallet will offer the EU citizens and businesses that will be able to link their national digital identities with proof of other personal attributes (e.g: driving license, diplomas, bank account, Covid-19 vaccination details, and so on). In other words, this special digital wallet allows all Europeans to access services online without having to use private identification methods. These smart digital wallets may be provided by public authorities or certified private entities.

Moreover, smart digital wallets give consumers access to a wider spectrum of services as these smart digital wallets consolidate installment payments, bill payments, buy now pay later (BNPL), with shopping, support, delivery, rewards, gift cards, chat rooms, and return the goal of transforming themselves from being a smart digital wallets into being an end-to-end super app. Besides, this super app will allow a network of partners to send and receive money from more than 200 countries and territories easier.

However, some people prefer smart digital wallets to super apps as what they want to share is not identity but authentication. These users expect the digital wallets to present their credentials in privacy-maximizing order, and they only have to share their credentials when they are asked if they are over 18, or have a driver's license.

6. What are crypto digital wallets? What are the advantages of crypto digital wallets?

6-1. What are crypto digital wallets?

Crypto digital wallets are a unique kind of wallet used to store your cryptocurrency passwords in one central place. Crypto digital wallets allow you to manage all your currencies in one place, send and receive money, and even shop at stores that accept crypto. Crypto digital wallets can be accessed via your mobile phone or on another portable device, similar to how online banking apps work.

Crypto digital wallets are a unique kind of wallet.

Crypto digital wallets are a unique kind of wallet.

6-2. Advantages of crypto digital wallets:

- Funds transfer between two parties within crypto digital wallets will be easy without the need of third parties like credit/debit cards or banks.

- Crypto digital wallet is a cheaper alternative compared to other online transactions.

- Payments are safe and secured.

Learn more about the

Learn more about the benefits of crypto payment gateway.

Read more:

About PayCEC

PayCEC’s secure payment gateway was established in response to the growing need of global online businesses to accept online payments more quickly and easily. In the digital era, our payment flow has evolved to work seamlessly and effectively across all platforms and devices. We pride ourselves on combining superior technology with first-class customer service.

PayCEC’s secure payment gateway for online businesses is a truly global payments platform that not only allows customers to get paid instantly and securely, but also withdraws funds to their business accounts in various currencies.

We have created an open and secure payments ecosystem that entrepreneurs and businesses choose to securely transact with each other online and on any device. We proudly maintain the highest level of client advocacy in the industry.

PayCEC Team

[email protected]

+44 2032 864370

www.paycec.com

Frequently Asked Questions

E-wallets make money on fees from transactions: deposit, withdrawal, or transfer fees. Sometimes on charging users for having but not using account.

- The e-wallet securely stores virtual versions of debit and credit cards, so you don’t need to enter your card details or carry a physical card at all to make payments.

- You can also save digital tickets and e-vouchers there, so you always have the documents you need on hand.

- E-wallets allow you to send money to your friends and family across the nation and the globe as well

- The e-wallet makes it easier to stay on top of your finances, since there are detailed records of every transaction.

- Buyer protection with powerful security features, such as 3D Secure, PCI DSS, Tokenization.

- Merchants are verified so you can shop with mind at ease.

An important reason why e-wallet is better than cash is the security. The problem with walking around with large amounts of cash is that if it’s stolen or lost, you’ll likely never get it back. While a thief could grab your wallet and get access to your credit cards in seconds, e-wallets encrypt your information to help safeguard it from hackers. Even if somebody steals your phone, the thief would likely still need a passcode or biometric authentication to access the information in an e-wallet. In some cases, if the buyer is cheated, they can claim within a certain time to receive a refund.

Disadvantages of e Wallet:

Digital wallets could encourage overspending.

The convenience of having easier access to your cards can be a downside. It means your impulse buying increases because you constantly have your digital wallet at your disposal.

There may be fees involved with an e-wallet.

Be sure to look into any potential fees when you start using a digital wallet.n Withdrawal fee may occurs when you withdraw fund out of ewallet to local bank account

If you are wondering what your e-wallet number is, it's most likely the mobile number that you are using right now. You can find your e-wallet number on the profile page in the app or on the receive funds section. Please contact our Relationship Manager for further assistance.

In cases where your e-wallet does not use a number to make credentials but an email, you just need to remember the registered email which is also your wallet account information.

Most e-wallet service providers set a certain monthly transaction limit. According to statistics from the SBV, the average limit for each individual e-wallet worldwide is $206 per month.

For customers:

Step 1 : Download the e-wallet app on your device.

Step 2: Sign up by entering the relevant information.

Step 3: Enter the verification code.

Step 4: Load money using credit/debit card.

Step 5: After shopping online, the e-wallet automatically fills in the user's information on the payment form.

(Once the online payment is made, the user is not required to fill the order form on any other website as the information gets stored in the database and is updated automatically.)

For merchants:

Step 1: Merchant downloads the e-wallet app on his/her device.

Step 2: Sign up by entering the relevant information.

Step 3: The merchant will receive a password.

Step 4: Self-declare yourself as a merchant.

Step 5: Start accepting payments.

With a good e-wallet, you can send or receive money, or make payments at online and offline stores as it eliminates the need to enter the receiver’s bank details. Besides, you can send money to anyone anywhere and at any time with the help of a good e-wallet. A good e-wallet can also be used to purchase train/flight tickets, pay electricity bills, reserve gas cylinders, pay school fees, complete mobile recharge transactions, and much more.

It is always recommended to download the e-wallet from the authorized platform, as well as from the Google Play or Apple Store. It is strongly advised never to download an e-wallet from another app or website.

Opening an e-wallet account is simple. Here are 5 steps to create an e-wallet account:

Step 1: Download the e-wallet app.

Step 2: Enter relevant information.

Step 3: Set a PIN.

Step 4: Link your payment cards.

Step 5: Make payments.

PayPal One-Touch ™: It is an extension of services offered by PayPal that enables users to make payments or transactions without the need of logging in or entering passwords.

Google Pay: Google Pay is a UPI enabled payment wallet that allows you to send or receive money directly from or to your bank account respectively. You can make transactions by any credit/debit card that you have stored with Google Pay already.

Apple Pay: It is a wallet that is exclusively made for the users of iPhone, iPads, and Apple Watches, and can be used to make both online and in-store purchases.

There are plenty of digital wallet apps to choose from. The decision really comes down to your needs, location, and what kind of smartphone you’re using.

The best three digital wallets are Apple Pay, Google Pay, and Samsung Pay. PayPal can also function as digital wallets, both in stores and online. Apple Pay, for example, is the go-to for iPhone users, while Google Pay is for anyone with an Android. Others prefer PayPal, which is accepted internationally.

Closed wallet

- A closed wallet enables users to make payments via an app or website.

- They are typically created by businesses that sell products or services to their customers.

- Users of a closed wallet can only use the stored funds to complete a transaction with the wallet’s issuer.

- If a transaction is canceled or a refund is issued, the entire amount is stored in the wallet.

Semi-closed wallet

- A semi-closed wallet allows users to easily make transactions at merchants and locations that are listed.

- Semi-closed wallets have a limited coverage area.

- To accept payment from the wallet, merchants must accept the contract or agreement with the issuer.

Open wallet

- Banks provide open wallets.

- Users with open wallets can use them for any type of transaction.

- Open wallets allow you to easily transfer funds.

- Payments can be made both online and in-store at any time.

- The open e-wallets service provider allows users to conduct transactions from anywhere in the world; however, both the sender and the receiver must have accounts on the same application.

Crypto wallet

- Users’ public and private keys are stored in cryptocurrency wallets.

- The keys could be cryptocurrency ownership certificates.

- Hardware wallets, also known as cold wallets, add an extra layer of security and safety.

- A USB stick can be used to operate wallets offline.

- These wallets can be used to make cryptocurrency payments.

IoT wallet

- IoT is an abbreviation for the Internet of Things.

- These are installed in watches, jackets, wristbands, or other wallet enabled devices such as smart car computers, smart refrigerators, and others.

- IoT wallets work with e-money and virtual currencies.

Digital wallets are becoming an increasingly popular alternative to cash or using a debit or credit card to make payments. Digital wallets give you the freedom to make payments at retailers without carrying a physical wallet with you. It can be more secure than carrying cash or using a debit or credit card.

An e-wallet needs to be linked with the individual's bank account to make payments. Bank account helps you top-up funds to your e-wallet, and also a place to withdraw cash out of your e-wallet, so it is necessary to integrate e-wallet with your bank accounts.

Upon registration, users can top-up their wallet balance and start sending and receiving money between mobile phones, transfer to own or third-party bank accounts, settle merchants, and bill payments.

Users can also request others to transfer money to their e-wallet by peer to peer transfers with the same wallet so you can fund more money into your wallet to continue spending.

- A major digital wallet is typically already downloaded to your mobile device or can be downloaded from the app store for free.

- Most e-wallets are free, but you might come across some fees, such as transaction fees.

Setting up your digital wallet is easy. Simply download or open the wallet you want to use (Google Pay, Apple Pay, PayPal, etc.), and add a payment method, or more than one. you can use it to make online or contactless payments, and add boarding passes, store tickets and coupons, and much much more.

Get started:

  • Step 1: Download e-wallet app.
  • Step 2: Follow easy registration steps,
  • Step 3: Load your wallet.
  • Step 4: Link with your bank account or credit/debit cards.
  • Step 5: Enter your password (private key).
  • Step 6: Ready to pay.

Above all, to accept e-wallet payments from shoppers, merchants need to make sure you must have a smartphone, a mobile payment gateway (such as PayCEC), and Internet connection. Please contact our Relationship Manager for further assistance.

There are 4 types of digital wallets: closed, semi-closed, and open.

Closed wallets: are produced by companies, and can only be used to transfer funds between the user and wallet-issuer, such as Amazon Pay.

Semi-closed wallets: are for users making transactions at a given list of merchants.

Open wallets: are issued by banks or their partners, and can be used for any kind of transaction, including ATM withdrawals.

Crypto wallets: are a unique kind of wallet used to store your cryptocurrency passwords in one central place. They allow you to manage all your currencies in one place, send and receive money, and even shop at stores that accept crypto.

Apple Pay

Payments with Apple Pay are verified using Touch or Face ID, so you can have maximum security with minimal effort.

Google Pay

Google Pay uses NFC technology so you can pay with a fingerprint or a password, and your card information is always encrypted.

Samsung Pay

Samsung users can also set up Samsung Pay, another widely accepted electronic payment system equipped with MST and NFC technology.

PayPal

Add your virtual credit/debit card or even bank account to PayPal so you can check out with a single tap anywhere PayPal is accepted.

Near Field Communication (NFC) is a collection of short-range wireless technologies that require a connection distance of 4cm or less to establish. NFC allows you to transfer tiny data payloads between an NFC tag and an Android smartphone, or between two Android devices.

Magnetic Secure Transmission is a cutting-edge technology that powers Samsung Pay. When swiped, it generates a magnetic signal similar to that of a standard payment card, allowing you to pay fast on the go without having to reach for your wallet.

In addition, there are lots of digital wallets out there currently available:

  • Venmo
  • Cash App
  • Zelle
  • Walmart Pay
  • Dwolla
  • Facebook Pay
  • Amazon Pay
  • Alipay

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About us

who we are

about us

We are honored to serve as your reliable business partner and financial service provider in the industry and other business-related services. With the help of our professional staff, to help merchants to achieve their goals for the development and expansion of the international business market.

Our payment flow has developed in the e-commerce world to perform seamlessly and effectively across all platforms and devices. We take pleasure in combining technology with customer service, to solve your concerns at the moment.

PayCEC is a fully worldwide payment network that not only allows merchants to be paid immediately and securely, but also allows them to withdraw money in multiple currencies to their company accounts.

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