The E-wallet has become very popular around the world and is one of the payment systems that securely store payment information and passwords for its users in order to be used as a payment method. The e-wallet can also be used to store loyalty card information and digital coupons. Let us here discuss the E-wallet Payment System.
E-wallet Payment System
It is a secure place that contains one or more currency purses. Your shoppers can fund an e-wallet in several different ways. Once funded, shoppers can use e-wallets online to buy goods or services. the payment process of an eWallet is significantly different to that of card payments; during the payment process the shopper is authenticated, he/she then has access to the full features and functions of the e-wallet account. This account may include currency conversions, top-ups, and access to other payment service providers. Shoppers may also have the option to create an unverified eWallet account during the payments process.
There are three types of E-wallets:
- Open wallets. This type of E-wallet can only be issued by banks or their partner institutions. It can be used to transfer funds from one account to another and to withdraw cash from ATMs. In fact, open wallets work much like credit and debit cards.
- Closed wallets. It is a mobile wallet or an e-Wallet which is designed for making full or part payment for the services directly provided by the wallet issuer. A Closed wallet cannot be used for making payments to any third party service providers or for money transfer.
- Semi-closed wallets. it is a wallet that can be used to buy goods and services, as it is a payment instrument that is redeemable of clearly identified merchants that contract specifically with the issuer to accept the payment instrument. This type of wallet does not permit cash withdrawal or redemption by the holder.
How It Works
The initial setup of an E-wallet requires a leap of faith for customers. They must trust that their information will remain secure not only on their smartphone but also in the archives of the E-wallet provider. In order to get started with the technology, customers must input their bank account and credit card information since these are the places from which their funds will be drawn when the time comes to making a payment.
The E-wallet does not necessarily contain any funds. It is up to the customer to decide when or if they wish to place monies there.
A payment transaction can be described as an encrypted conversation that takes place between two banks: the customers and the retailers. E-wallet payments are beneficial to buyers and sellers alike because of their heightened security protocols and the fact that a customer’s credit card information never becomes known to a merchant in the same way it once did when people used magnetic stripe cards.
The transaction proceeds quickly and securely, with the funds drawn from the customer’s E-wallet or bank balance and sent within seconds to the merchant.
once the process is complete, both parties receive what they expect; the customer gets a product or service, and the merchant is paid appropriately for what has been purchased.
Thorough records are kept by the seller’s merchant services provider as well as the sponsor of the customer’s e-wallet, enabling everyone to have accountability should any questions or disputes arise.
Advantages of the E-wallet Payment System
- Easy Checkout Process.
- Immediate Transfer of Funds.
- Quick Processing and Instant Delivery.
- Easy and Uncomplicated.
Disadvantages of the E-wallet Payment System
- Account With The Provider.
- Relativity Expensive.
There are different providers for e-wallets and often, providers are only available in certain countries or regions. Therefore, it’s important to be well informed on which e-wallets are available and popular in your shop’s target region or country so that you optimize the experience for your customers’ chosen method of payment. For example, the provider Qiwi is only available in Russia, and the chosen e-wallets of China include Alipay and We Chat Pay.