How E-Wallets Work?

With the progress of time, payment methods have significantly advanced, and for the better. Cashless payments were trending even before the COVID-19 pandemic, and after it, they gained immense popularity. Cashless payments include online payments, payments through cards, and recently, payments using e-wallets. E-wallets are increasingly becoming the preferred payment method of customers. They remove even the need to carry a card. The convenience of an e-wallet is even more than that of a credit or debit card because of the quality FinTech involved. E-wallets can become means for better payments and more satisfied customers for your business as well.

The Working of E-wallets

So how do e-wallets work? First, there comes the step of trusting both your cellphone security and the E-wallet service provider enough to input your card’s information into the application. This can be a step which causes many customers to avoid e-wallets as a whole. The e-wallet does not in itself contain any funds. It is at the discretion of the customer whether or not to keep any funds there at all. E-wallets allow the issuing and acquiring banks, or the banks of the customer and the merchant, to communicate directly. The increased security requirements make them beneficial to both. Furthermore, the card information is not available to the retailer how it is in dipping, keying-in, or swiping a card. Therefore it can be a much better option for customers in the long run. 

The funds are drawn within seconds from the e-wallet of the customer and sent to the merchant. This is a very secure and quick method of payment, therefore favorable for the merchant. The merchant then provides the customer the goods or services they paid for. The merchant is compensated for their products or services. In the case of an arising dispute, both the merchant services provider of the seller and the customer’s e-wallet service have records of all the transactions. This helps to significantly reduce any fraudulent activity concerning the transaction.

Different types of E-wallets

Venmo

Even though Venmo too is owned by Paypal now, the application has around 52 million followers as of 2020. It featured a very social media-like aesthetic and proved to be an excellent way to transfer funds between friends and family. Recently it has started to be used by small companies to take care of their transactions as well. 

The thing about the application is that transactions except transferring funds from a credit card are entirely free. Credit card transfers are charged 3% of the amount transferred. For all bank transfers, there is a three-day wait. If you want an immediate transfer, you will have to pay a 1% fee for that. Sending funds from one Venmo account to another is instant and free.

Samsung Pay

This is one of the most well-established and trusted e-wallet applications in the market. The application was launched back in 2011 and is only available to Samsung users. Still, other than that, it has proven to be extremely functional and convenient. Samsung pay allows online transactions, in-person payments, and payments on the application. Furthermore, they have a reward system that gives rewards like cash back or coupons for customers that use the app regularly. 

eWallet

The eWallet app is available for a fee in the app store. While most of the applications that handle e-wallet transactions are free of cost on the app store, the eWallet app has ways to compensate for its price. The eWallet also has applications installed across Mac or Windows OS, so you are not just bound to your cellphone. The application goes beyond just holding your credit card information. It contains information for your passport, insurance cards, loyalty cards, frequent flyer card of airlines, and library cards as well. Mobile payments are not possible through the application, and it is just a means to secure all your sensitive information in one place.

Paypal One Touch

Paypal One Touch is an extension of the usual services of Paypal. Given the reputation of Paypal for online transactions, it is a widely used option for online transactions. It serves for swift and secure payments across most platforms and offers convenience of use as well. Users can extend this application from cellphone to desktop, tablet, or even a laptop. Even though it’s the most reputed e-wallet service, there is still a fee on credit cards.

Apple Pay

This is a very user-friendly application that is designed just for users of iPhones or Apple Watches. It allows both in-store payments using the face-id or PIN of the user and online payments. A compatible POS system is needed to accept Apple Pay. It is one of the most seamless and secure methods of e-wallet payments.

Benefits of E-wallets

E-wallets are very convenient compared to physical wallets. Keeping a bulky wallet filled with cash and digging for your card each time you have to make a transaction can be very frustrating. Not to mention that an e-wallet is much safer than having to carry a lot of cash around; it can be a massive loss of time to have to cancel all your cards and apply for new identification in case you lose your wallet by any means. E-wallets remove this trouble, as even if someone stole your phone, breaking through the phone’s password and then the e-wallet app would be much more troublesome than to take stuff out of a wallet. Also, phones are much more trackable than wallets, giving you a chance to have suffered no loss at all. 

E-wallets allow you an even better experience on online shopping as they are much quicker and easier to use. The way these applications organize your data and your transactions can be a game-changer for people who keep track of their spending. Some other significant benefits are the variety of rewards that users can potentially get on using e-wallet applications. The e-wallet services provide discounts, cashback, and other rewards upon the usage of the service. Coupled with a credit card, you can maximize your savings to an extraordinary level.