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A digital wallet is an application or service that runs on software and lets users store, manage, and exchange digital assets like loyalty cards, payment cards, and other virtual currencies. Digital wallets aim to give consumers an easy and safe way to conduct electronic transactions both online and in real-world retail establishments.
It is also called an electronic wallet, enabling individuals to securely store, organize, and conduct electronic transactions across diverse online platforms, including debit and credit cards. It typically diminishes the need for physical payment exchanges while encouraging a greater dependence on online transactions.
The key features of Digital wallets include:
Store all payment information: Users no longer need to carry actual credit or debit cards because digital wallets securely store this information and knowledge about other payment options.
Carry-on Transaction: Users can use the payment information they have stored to perform digital payments and transactions. This can apply to contactless payments in real stores, in-app purchases, and purchases made online.
Make use of Security Measures: To protect users’ financial information, digital wallets frequently use a variety of security measures like tokenization, biometric identification (such as fingerprint or facial recognition), and encryption.
Integrate with Mobile Devices: Many digital wallets are smartphone-integrated, making it simple for users to access their wallets through mobile apps. This makes transactions easier when moving.
Support Multiple Currencies: Certain digital wallets allow users to manage their financial assets more easily by supporting a variety of cryptocurrencies in addition to conventional fiat currencies.
The digital wallets are divided into 3 types based on their functionality and ease of use- Closed, open, and semi-closed wallets.
Some of the commonly used digital wallets are listed below: