The standard wallet has undergone a significant transformation in recent years — from a tangible cash and card holder to an app that stores bank and credit card details that can be used to make purchases via a smart device.
This article includes tips, suggestions and general information. We recommend that you always do your own research and consider getting independent tax, financial and legal advice before making any important decision.
Convenient, secure, and easy to use, digital wallets have become a popular payment method worldwide, accounting for nearly half of all global ecommerce sales.1
A digital or e-wallet is a payment tool, usually in the form of an app, that facilitates purchases using a smartphone, smartwatch, or other digital device.
Digital wallets store financial data and can make transactions quick and simple. They remove the need to carry around physical cards or money, should one choose to take this path.
To make a purchase, a digital wallet communicates stored credit card or bank details to the vendor’s point of sale system, either through a magnetic signal or the device’s Bluetooth or Wi-Fi connection.
Unique tokens are used to create one-time transaction numbers for each purchase. They’re encrypted to help protect the user’s data and then processed and communicated to the relevant card institutions and banks.
Digital wallets usually work through the following technologies:
In addition to streamlining payments, digital wallets can be used to store:
Depending on the type of digital wallet, there are different formats and levels of access, including:
From quick payments and hassle-free transactions to keeping information organised and accessible, digital wallets can offer benefits. Below are some examples:
Though generally safe, it’s important to consider potential drawbacks of digital wallets. These could include:
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