What is an Electronic Wallet (e-wallet) and How Does It Work?
December 29, 2021
With the development of e-commerce, electronic wallets have become a popular and affordable means of making payments.
What are Electronic Wallets Like
An electronic or digital wallet is an online service, electronic device, software, or mobile application that allows you to make non-cash payments using a desktop computer, laptop, or mobile device.
By the type of access, the virtual wallet can be
- open, allowing online purchases, contactless payments, etc. no limits,
- closed, allowing you to make transactions only with a specific group of sellers or the retailer who issued the wallet.
According to the location mode, electronic wallets are divided into
- hot, connected to the Internet,
- cold – information located on a physical medium (card, chip, etc.).
A virtual wallet stores two types of data: about the user and his assets. The user data includes:
- authentication data (unique username (login) and access password),
- personal information (name, date of birth, address) required to register a wallet,
- communication channels with the user (email address, phone number), allowing the developer to contact the owner, if necessary,
- payment instruments (account number, bank card number) required for the transaction,
- payment history.
Asset information is data about funds that are available to the user:
- electronic money,
- points awarded for participation in the loyalty program,
- gift certificates, etc.
How e-Wallet Works
The user visits the website, selects and downloads the mobile wallet app. Then he creates a personal account and enters the data required for registration, and also links up the card or bank account from which the payment will be made.
The payment process is as follows:
- The buyer chooses a product or service that he intends to pay for.
- Logs into an electronic wallet and authenticates.
- The marketplace and wallet exchange data.
- The funds are credited to the seller’s account.
- The buyer receives confirmation of the payment made.
If the wallet is connected to the loyalty program, the user also receives information about the accrued points or cash back.
How a Company Can Create Its Own Internet Wallet
Brands looking to offer their customers their own payment systems can take advantage of Wallet Factory’s white label offer and get a turnkey solution with their own logo.
- Also, Read This: Walleon – GPS Wallet with Style