E-Wallets, sometimes referred to as digital wallets, are making the items found in a physical wallet – cash and credit cards – disappear. An e-wallet is an application on a smartphone or personal computer that stores virtual versions of those items and allow for monetary transactions. Digital wallets store cash, credit cards and banking information, among other items, and frees the consumer from carrying a physical wallet. It is premature to declare that they have eliminated physical wallets, but experts in the payments industry believe that is the direction consumers and merchants are going.
How Does an E-Wallet Work?
E-Wallets can be grouped into two broad categories: client-based and server-based. Client-based e-wallets refer to the consumer or end user. Consumers download a program on their personal computer or install an app on their smartphone and enter pertinent credit card and shipping information. Upon checkout at a website or a mobile payment-friendly store, a consumer selects which credit card to use to complete the transaction.
A server-based mobile wallet is when the consumer’s credit card information is securely stored and maintained by the credit card company. An example of a server-based e-wallet is Visa’s ‘V.me,’ in which consumers enter an e-mail address and password at the point of sale and the transaction is complete. It should be known that V.me also enables consumers to store MasterCard, American Express and Discover card information, among others, in its digital wallets.
E-Wallets Are Not Limited to Cash and Credit Cards
Along with storing cash and credit cards, e-wallets have also become the ideal storage platform for a number of items: Important documents such as your driver’s license, company identification badge or health club ID; gift cards; airline boarding pass or commuter rail ticket; and loyalty cards from the local bookstore or coffee shop. Recently, Instabill blogged about how the Starbucks smartphone app, with 10 million users, is the standard that tracks spending, loyalty points and alerts when a consumer is eligible for a free latte.
E-Wallets Will Replace Wallets
Eventually, experts predict mobile wallets will vastly outnumber that of the leather and velcro type. A provider of merchant account solutions to businesses worldwide, Instabill also offers many other services to its merchant accounts, including secure digital wallets. Speak with a live merchant account manager today at 1-800-318-2713