Digital Wallet

Digital wallets, also known as e-wallets, have revolutionized the way consumers make payments for various goods and services. The digital payments scenario is slowly becoming a trend and a way of life. Many economists and scholars believe that it has the potential to turn into the most coveted type of payment mechanism in the future.

What is a Digital Wallet?

A digital wallet an electronic version of a physical wallet, which can be used for making payments. A digital wallet used on a smartphone is called a mobile wallet.

As India is shifting towards a cashless economy and a bright digital future, the Indian government has been taking multiple initiatives to promote the use of such technology. The Indian Government's UPI-based BHIM app is a great start towards a digitized economy.

How Does a Digital Wallet Work?

A digital wallet contains the encrypted versions of your card details through which you can make purchases online. A digital wallet typically asks customers to register for the service in the beginning by entering card details. Then the information is verified through an OPT authentication procedure, after which, the registration is complete. Henceforth, the user can choose the digital wallet option as a payment mode on various e-commerce websites that provide this option. The payment can easily be made by entering the digital wallet username or ID and its password. The transaction is typically authenticated through an OTP or a 3D-secure pin.

Online Payments

Making online payments through a digital wallet takes much lesser time when compared to debit or credit card payments. One can use digital wallets for paying utility bills, DTH plans, postpaid mobile bills or even recharge a prepaid connection. Digital wallets can also be used for making purchases on e-commerce sites. Most e-commerce sites have tie-ups with various digital wallet companies.

Making Payment Through Digital Wallets on an E-commerce Site

• Log into the e-commerce website.
• Add the product of your choice to a cart
• Under the payment mode, select 'Wallet'
• Select the respective wallet
• Make the payment

The Scope of Digital Wallets

Digital wallets are highly useful for making online purchases from the e-commerce websites. You can do the following using a digital wallet:

• Pay several utility bills like electricity, telephone bills, prepaid recharge, booking movie tickets, etc
• Make payments for online food orders
• Make payments for travel bookings
• Transfer funds online
• Purchase mutual funds and insurance and other financial products

FAQs

Why should I use a digital wallet?

It is a safe, secure and quick mode of payment for goods and services. It reduces the need to carry cash.

What are the charges or transaction fees for digital wallets?

Most digital wallets are entirely free of cost. However, some might charge a nominal service fee.

Do digital wallets provide cash back and rewards for usage?

Yes, they do so quite often.

Where can a digital wallet be used?

It can be used wherever cashless payments are being accepted.

Is it safe to use digital wallets?

Yes, it is very safe. Bank information is not stored by the digital wallets. Whatever data is saved is encrypted; transactions cannot be initiated without a PIN or a password.

How to know if a particular e-commerce site accepts a certain digital wallet?

Check in the payments section, the names of the usable digital wallets will be listed.

What are the transaction limits on digital wallets?

Most of the digital wallets set a certain monthly transaction limit which varies from one wallet to another.

Do digital wallets allow users to track purchases?

Yes.

Can merchants access card details or card number?

No.