Digital wallet

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A digital wallet, also known as an e-wallet or mobile wallet, is an electronic device, online service, or software program that allows one party to make electronic transactions with another party bartering digital currency units for goods and services. This can include purchasing items either online or at the point of sale in a brick and mortar store, using either mobile payment (on a smartphone or other mobile device) or (for online buying only) using a laptop or other personal computer. Money can be deposited in the digital wallet prior to any transactions or, in other cases, an individual's bank account can be linked to the digital wallet. Users might also have their driver's license, health card, loyalty card(s) and other ID documents stored within the wallet. The credentials can be passed to a merchant's terminal wirelessly via near field communication (NFC).

Contents

Increasingly, digital wallets are being made not just for basic financial transactions but to also authenticate the holder's credentials. For example, a digital wallet could verify the age of the buyer to the store while purchasing alcohol. The system has already gained popularity in Japan, where digital wallets are known as "wallet mobiles". [1] In addition, a few US states have adapted digital driver's license and state IDs to be added to digital wallet in lieu of the physical card and it can be used at selected TSA checkpoints at airports, banking or enterprise. [2]

A cryptocurrency wallet is a digital wallet where private keys are stored for cryptocurrencies like bitcoin.

Technology

A digital wallet has both a software and information component. Secure and fair electronic payment systems are an important issue. [3] The software provides security and encryption for the personal information and for the actual transaction. Typically, digital wallets are stored on the client side and are easily self-maintained and fully compatible with most e-commerce websites. A server-side digital wallet, also known as a thin wallet, is one that an organization creates for and about you and maintains on its servers. Server-side digital wallets are gaining popularity among major retailers due to the security, efficiency, and added utility it provides to the end-user, which increases their satisfaction of their overall purchase. [4] The information component is basically a database of user-input information. This information consists of your shipping address, billing address, payment methods (including credit card numbers, expiry dates, and security numbers), and other information.

Digital wallets are composed of both digital wallet devices and digital wallet systems. There are dedicated digital wallet devices such as the biometric wallet by Dunhill, [5] a physical device that holds cash and cards along with a Bluetooth mobile connection. Presently there are further explorations for smartphones with NFC digital wallet capabilities, such as smartphones utilizing Google's Android and Apple's iOS operating systems to power wallets such as Google Pay and Apple Pay.[ citation needed ]

Digital wallet systems enable the widespread use of digital wallet transactions among various retail vendors in the form of mobile payments systems and digital wallet applications. The M-PESA mobile payments system and microfinancing service has widespread use in Kenya and Tanzania, [6] while the MasterCard PayPass application has been adopted by a number of vendors in the U.S. and worldwide. [7]

Digital wallets are being used more frequently among Asian countries as well. One in every five consumers in Asia are now using a digital wallet, representing a twofold increase from two years ago. A MasterCard mobile shopping survey among 8500 adults, aged 18–64 across 14 markets, showed that 45% of users in China, 36.7% of users in India and 23.3% of users in Singapore are the biggest adopters of digital wallets. The survey was conducted between October and December 2015. Further analysis showed that 48.5% of consumers in these regions made purchases using smartphones. Indian consumers are leading the way with 76.4% using a smartphone to make a purchase, which is a drastic increase of 29.3% from the previous year. This has inspired companies like Reliance and Amazon India to come out with their own digital wallet. Flipkart has already introduced its own digital wallet. [8]

Security

Consumers are not required to fill out order forms on each site when they purchase an item because the information has already been stored and is automatically updated and entered into the order fields across merchant sites when using a digital wallet. Consumers also benefit when using digital wallets because their information is encrypted or protected by a private software code; merchants benefit by receiving a combination of protection against fraud, faster receipt of payment, decreased transaction costs, and decreased theft loss.

Digital wallets are available to consumers free of charge, and they're fairly easy to obtain. For example, when a consumer makes a purchase at a merchant site that's set up to handle server-side digital wallets, they type their name, payment and shipping information into the merchant's own form. At the end of the purchase, the consumer is asked to sign up for a wallet of their choice by entering a user name and password for future purchases. Users can also acquire wallets at a wallet vendor's site.

Most, if not all digital wallets offer advanced security features e.g. biometric authentication and encryption, this protects the financial information of the users thus preventing fraud. [9]

European Payments Initiative

With the acquisition of iDEAL, European Payments Initiative (EPI) Company has announced that it will create an all European digital wallet. [10] [11] [12] [13]

See also

Related Research Articles

<span class="mw-page-title-main">Mobile payment</span> Payment services via a mobile device

Mobile payment, also referred to as mobile money, mobile money transfer and mobile wallet, is any of various payment processing services operated under financial regulations and performed from or via a mobile device. Instead of paying with cash, cheque, or credit card, a consumer can use a payment app on a mobile device to pay for a wide range of services and digital or hard goods. Although the concept of using non-coin-based currency systems has a long history, it is only in the 21st century that the technology to support such systems has become widely available.

<span class="mw-page-title-main">Near-field communication</span> Radio communication established between devices by bringing them into proximity

Near-field communication (NFC) is a set of communication protocols that enables communication between two electronic devices over a distance of 4 centimetres (1.6 in) or less. NFC offers a low-speed connection through a simple setup that can be used for the bootstrapping of capable wireless connections. Like other proximity card technologies, NFC is based on inductive coupling between two electromagnetic coils present on a NFC-enabled device such as a smartphone. NFC communicating in one or both directions uses a frequency of 13.56 MHz in the globally available unlicensed radio frequency ISM band, compliant with the ISO/IEC 18000-3 air interface standard at data rates ranging from 106 to 848 kbit/s.

The term mobile commerce was originally coined in 1997 by Kevin Duffey at the launch of the Global Mobile Commerce Forum, to mean "the delivery of electronic commerce capabilities directly into the consumer’s hand, anywhere, via wireless technology." Many choose to think of Mobile Commerce as meaning "a retail outlet in your customer’s pocket."

Proximity marketing is the localized wireless distribution of advertising content associated with a particular place. Transmissions can be received by individuals in that location who wish to receive them and have the necessary equipment to do so.

<span class="mw-page-title-main">NETS (company)</span> Singaporean electronic payment service provider

Network for Electronic Transfers, colloquially known as NETS, is a Singaporean electronic payment service provider. Founded in 1986 by a consortium of local banks, it aims to establish the debit network and drive the adoption of electronic payments in Singapore. It is owned by DBS Bank, OCBC Bank and United Overseas Bank (UOB).

<span class="mw-page-title-main">Google Pay Send</span> Mobile payment system developed by Google

Google Pay Send, previously known as Google Wallet, was a peer-to-peer payments service developed by Google before its merger into Google Pay. It allowed people to send and receive money from a mobile device or desktop computer.

Moneris is a Canadian financial technology company that specializes in payment processing.

<span class="mw-page-title-main">Contactless payment</span> Technology enabling payment without physical contact

Contactless payment systems are credit cards and debit cards, key fobs, smart cards, or other devices, including smartphones and other mobile devices, that use radio-frequency identification (RFID) or near-field communication (NFC) for making secure payments. The embedded integrated circuit chip and antenna enable consumers to wave their card, fob, or handheld device over a reader at the point-of-sale terminal. Contactless payments are made in close physical proximity, unlike other types of mobile payments which use broad-area cellular or Wi-Fi networks and do not involve close physical proximity.

JVL Ventures, LLC d/b/a Softcard, was a joint venture between AT&T, T-Mobile and Verizon which produced a mobile payments platform known as Softcard, which used near-field communication (NFC) technology to allow users to pay for items at stores and restaurants with credit and debit card credentials stored on their smartphones. The partnership was first announced on November 16, 2010; following a trial period in 2012, the service officially launched nationwide on November 14, 2013. The official Softcard app was available for NFC-compatible smartphones using the Android operating system and later on Windows Phone 8.1.

Merchant Customer Exchange (MCX) was an American company created by a consortium of U.S. retail companies to develop a merchant-owned mobile payment system, which was to be called "CurrentC." The joint venture was announced on August 15, 2012.

<span class="mw-page-title-main">Apple Wallet</span> Digital wallet platform by Apple

Apple Wallet is a digital wallet developed by Apple Inc. and included with iOS and watchOS that allows users to store Wallet passes such as coupons, boarding passes, student ID cards, government ID cards, business credentials, resort passes, car keys, home keys, event tickets, public transportation passes, store cards, and – starting with iOS 8.1 – credit cards, and debit cards for use via Apple Pay.

Microsoft Pay was a mobile payment and digital wallet service by Microsoft that allowed users to make payments and store loyalty cards on certain mobile devices, as well on PCs using the Microsoft Edge browser. Microsoft Pay does not require Microsoft Pay-specific contactless payment terminals, and supported existing contactless terminals if used on mobile devices. Similar to Android Pay, Microsoft Pay utilized host card emulation (HCE) for making in-store payments.

Apple Pay is a mobile payment service by Apple Inc. that allows users to make payments in person, in iOS apps, and on the web. Supported on iPhone, Apple Watch, iPad, Mac, and Vision Pro, Apple Pay digitizes and can replace a credit or debit card chip and PIN transaction at a contactless-capable point-of-sale terminal. It does not require Apple Pay–specific contactless payment terminals; it can work with any merchant that accepts contactless payments. It adds two-factor authentication via Touch ID, Face ID, Optic ID, PIN, or passcode. Devices wirelessly communicate with point of sale systems using near field communication (NFC), with an embedded secure element (eSE) to securely store payment data and perform cryptographic functions, and Apple's Touch ID and Face ID for biometric authentication.

Venmo is an American mobile payment service founded in 2009 and owned by PayPal since 2013. Venmo is aimed at users who wish to split their bills. Account holders can transfer funds to others via a mobile phone app; both the sender and receiver must live in the United States. Venmo also operates as a small social network, as users can observe other users' public transactions with posts and emoticons. In 2021, the company handled $230 billion in transactions and generated $850 million in revenue. Users can view transactions on the Venmo website but cannot complete transactions on the website.

A cryptocurrency wallet is a device, physical medium, program or an online service which stores the public and/or private keys for cryptocurrency transactions. In addition to this basic function of storing the keys, a cryptocurrency wallet more often offers the functionality of encrypting and/or signing information. Signing can for example result in executing a smart contract, a cryptocurrency transaction, identification, or legally signing a 'document'.

<span class="mw-page-title-main">Google Pay (payment method)</span> Mobile payments platform developed by Google

Google Pay is a mobile payment service developed by Google to power in-app, online, and in-person contactless purchases on mobile devices, enabling users to make payments with Android phones, tablets, or watches. Users can authenticate via a PIN, passcode, or biometrics such as 3D face scanning or fingerprint recognition.

A QR code payment is a mobile payment method where payment is performed by scanning a QR code from a mobile app. This is an alternative to doing electronic funds transfer at point of sale using a payment terminal. This avoids a lot of the infrastructure traditionally associated with electronic payments such as payment cards, payment networks, payment terminal and merchant accounts.

<span class="mw-page-title-main">Touch 'n Go eWallet</span> Malaysian e-wallet service

Touch 'n Go eWallet is a Malaysian digital wallet and online payment platform, established in Kuala Lumpur, Malaysia, in July 2017 as a joint venture between Touch 'n Go and Ant Financial. It allows users to make payments at over 280,000 merchant touch points via QR code; pay for tolls, street parking, payment on e-hailing, car-sharing apps or taxis via RFID or PayDirect; pay bills; top-up mobile prepaid; pay for purchases on e-commerce websites or apps; order food delivery; perform peer-to-peer money transfers; renew car insurance and purchase unique insurance plans; and purchase movie, bus, trains, and airline tickets.

Google Wallet is a digital wallet platform developed by Google. It is available for the Android, Wear OS, and Fitbit OS operating systems, and was announced on May 11, 2022, at the 2022 Google I/O keynote. It began rolling out on Android smartphones on July 18, 2022.

<span class="mw-page-title-main">Samsung Wallet</span> Digital wallet platform by Samsung

Samsung Wallet is a digital wallet platform developed by Samsung. It is available for the Samsung Galaxy-exclusive One UI Android operating system, and was announced on February 9, 2022, at the February 2022 Samsung Unpacked event. It combines both Samsung Pay and Samsung Pass.

References

  1. ↑ Clark, Sarah (11 October 2012). "NTT Docomo to take Japanese mobile wallet global". NFC World. Archived from the original on 20 November 2017. Retrieved March 23, 2013.
  2. ↑ Barrett, Randy (February 8, 2023). "Digital Driver's Licenses Are Finding Their Way to State and Federal Agencies". FedTech. Archived from the original on November 1, 2023. Retrieved November 1, 2023.
  3. ↑ Kang, Baoyuan; Shao, Dongyang; Wang, Jiaqiang (2018). "A fair electronic payment system for digital content using elliptic curve cryptography". Journal of Algorithms & Computational Technology. 12 (1): 13–19. doi: 10.1177/1748301817727123 . ISSN   1748-3018.
  4. ↑ Miklesh Prasad Yadav, Madhu Arora (2019). Study on impact on customer satisfaction for E-wallet using path analysis model. International Journal of Information Systems & Management Science. SSRN   3369651. Archived from the original on 26 September 2022. Retrieved 26 September 2022.
  5. ↑ Murphy, David. "Dunhill Wallet Uses Biometrics". PC Magazine. Archived from the original on October 2, 2017. Retrieved March 23, 2013.
  6. ↑ "Dial M for money". The Economist. June 30, 2007. Archived from the original on January 15, 2013. Retrieved March 23, 2013.
  7. ↑ "PayPass Adoption Study". MasterCard Advisors. Archived from the original on March 1, 2021. Retrieved March 23, 2013.
  8. ↑ Chanchani, Madhav (7 March 2016). "Amazon India planning launch of digital wallet in a bid to build online payments business". Archived from the original on 31 January 2019. Retrieved 27 June 2017– via The Economic Times.
  9. ↑ "Top Five Emerging Trends in Procurement - SIPMM Publications". publication.sipmm.edu.sg. 2018-08-17. Archived from the original on 2023-04-06. Retrieved 2023-04-06.
  10. ↑ "Dutch payment processor iDeal to become European standard | NL Times". nltimes.nl. Archived from the original on 2023-06-29. Retrieved 2023-04-26.
  11. ↑ "EPI Company announces iDEAL and Payconiq acquisition". thepaypers.com. Archived from the original on 2023-04-26. Retrieved 2023-04-26.
  12. ↑ Dumitrescu, Irina (2023-04-25). "[GLOBAL] EPI Company announces acquisitions, additional shareholders and the coming launch of its new instant payment solution". European Payments Initiative. Archived from the original on 2023-04-25. Retrieved 2023-04-26.
  13. ↑ agency, Acato Digital (2023-04-25). "iDEAL Becomes More Ideal". iDEAL. Archived from the original on 2023-04-25. Retrieved 2023-04-26.
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