What is a digital wallet?
A digital wallet is an app that is an electronic version of your wallet – it stores information about your credit cards and bank accounts in electronic form on your phone. It can also store your driver’s license, health insurance card and other ID documents, as well as your passwords, loyalty cards from different stores, gift cards and digital coupons. A digital wallet is also known as mobile wallet, electronic wallet or e-wallet.
What is a digital wallet used for?
The main use of a digital wallet is to make payments – you can use it instead of using a credit or debit card, or writing a check. Stores can also use it for verifying the buyer’s age and credentials before selling certain items like alcohol.
How is a digital wallet used for payment? How does it work?
It’s simple: your financial details are stored in the e-wallet, and are transmitted wirelessly when your phone is held close to the store’s payment terminal. This is also called contactless payment.
What are the advantages of a digital wallet?
The main benefit of digital wallets is convenience – you don’t have to carry multiple cards with you. Another advantage is security – if a regular wallet is stolen, the thief has access to all your credit cards. But if your phone is stolen, your digital wallet is safe because a password or biometric authentication is still required to get access to it. Digital wallets can also track your spending habits, which can help with budgeting. Some digital wallets also offer rewards and perks to their users.
What are the disadvantages of a digital wallet?
Although the number of merchants supporting digital wallets as a mode of payment is increasing, the acceptance of the digital wallet could be limited. Also, you would not be able to use a digital wallet for payment if your mobile phone runs out of charge.