A digital wallet or an electronic wallet refers to a service that enables us to perform electronic transactions. These transactions can include tasks like transferring or receiving payments, buying goods online, etc. Digital wallets can even store your ID cards, licenses, or any other personal documents. This technology was specially introduced to cater to the issue of theft and snatching that was highly associated with physical wallets. Therefore, now you can carry all your valuables digitally rather than carrying a physical wallet with you all the time.
How does a Digital Wallet work?
A digital wallet is usually a mobile application that is typically linked with your actual bank account. In order to perform any transaction, all you have to do is to log in to that particular application by providing your credentials. The application will provide you with several options such as funds transfer to another account or even purchasing something online. You will be able to carry out the transaction successfully if you have a sufficient amount of money in your bank account or your digital wallet is loaded with cash if it is not linked with your bank account.
Important Features to look for in a Digital Wallet:
Although the specific features of a digital wallet depend upon the particular company who has designed that wallet. However, there are some common features that you should look for while starting to use the digital wallet and they are listed below:
- Before using any digital wallet application, you must ensure that all your personal data that the application keeps with it is kept encrypted. This adds to the additional security of digital wallets as compared with the actual physical wallets.
- The application should offer you a very friendly user interface i.e. it should take you a minimal amount of time to learn using this application and hence you should be less likely to make any mistakes while making electronic transactions.
- The digital wallet application should be capable of providing you with a maximum number of different payment gateways so that your options are not restricted and you can make electronic transactions via any desired payment gateway.
- The application should be able to store the debit and credit card related information of multiple bank accounts of the user.
- The digital wallet application should be capable of transferring money from the wallet to any bank account and also receive payments in the wallet from any bank account.
- You should be able to pay your utility bills via your digital wallet application.
- Your digital wallet should incorporate Point of Sale (PoS) integration so that you can pay for your goods via your digital wallet at any PoS terminal.
- In order to save your critical data, your digital wallet application should also support frequent backup facilities.
- Your digital wallet application should be efficient enough to keep your data synchronized across multiple platforms i.e. it instantly updates itself as soon as any changes are made to your bank account.
- A good digital wallet application also offers reward points upon successful completion of a transaction. This feature can prove to be very tempting for the users and hence it adds more to their level of satisfaction.
- Additionally, a mobile wallet application should also offer a 24/7 online monitoring service that keeps an eye on any possible fraudulent transactions. Moreover, it should also reimburse the losses, if any, faced by the users due to any faulty or fraudulent transactions.
Managing Transactions Smartly with a Digital Wallet:
Now you might be wondering why do we say that digital wallets manage your transactions smartly. Well, the answer to this question is quite simple and straightforward. The use of digital wallets has eliminated the need of carrying a physical wallet with you all the time. Similarly, you do not even have to carry a handsome amount of cash with you all the time and keep worrying about it being snatched. You can even store all your valuable personal documents in your digital wallet so that your original physical documents can stay protected. The use of digital wallets has also significantly reduced the time required to process a manual transaction. This is exactly why we say that digital wallets are capable of managing all your transactions very smartly.
Benefits of using a Digital Wallet:
Following are the main benefits of using a digital wallet:
- It is more convenient to use as you are allowed to perform your transactions online without having the need to physically visiting any place.
- It is more efficient than the physical modes of payment because it eliminates the need for standing in long rows at the payment counters.
- It saves you from the hassle of carrying your important personal documents physically with you all the time.
- Digital wallets keep you organized by taking care of all those objects that you are likely to keep in your physical wallets.
- It is more secure because all of your personal data stored on the digital wallet application is in an encrypted format.
- Some digital wallets also offer loyalty points to their customers for the sake of building a strong trust relationship with them.
- Most of the digital wallet applications are absolutely free. Therefore, you will not need to spend a single penny in order to use a digital wallet rather you can just start using it right away.
- Last but not least, digital wallet applications are usually designed to be extremely user-friendly. Therefore, you are not likely to face any hindrance while using a digital wallet.
After reading about all these amazing benefits of a digital wallet, you might be interested in using one immediately. However, you must also consider some of the downsides while making this decision. Firstly, these digital wallets are prone to system outages i.e. if the servers of the company offering this service go down even for some time, you will be rendered helpless as you will not be able to perform any transactions within that particular time.
Moreover, the compatibility of one organization with another is really important for this whole process. If you want to make a purchase from a company named XYZ while making use of your digital wallet but your digital wallet does not provide support for making transactions with that particular company, then you can really not do anything about it. Apart from these concerns, digital wallets are indeed a great invention of the modern era and if these concerns do not bother you much, then you should start using one right away.