As technology advances and we are able to move further into digital ways of doing traditional things, it’s important not to be left behind by missing key aspects of understanding these new ways. Digital payments have grown exponentially – the digital payments sector amounted to $3.4 trillion in 2018 and is expected to grow at a rate of 13.9%, which will see the industry worth around $5.7 trillion by 2022. As such, it’s an exciting time to get involved with some aspect of digital payments. The key to digital payments is understanding how they work and one factor involved in this is understanding what e-wallets are and how they work to keep money safe and allow us to make payments.
What are E-Wallets?
E-wallets are essentially digital means of storing money. They are secure and can contain purses of different currencies. E-wallets can be topped up in a variety of ways and then they can be used to make online purchases at a number of retailers. As the e-wallet platform is separate to the retailer’s site, they must undertake a verification process when signing up for an e-wallet. The shopper using the e-wallet is therefore authenticated to make purchases using the e-wallet.
What are the Benefits of E-Wallets?
E-wallets are safe and secure as they involve a complex level of encryption of personal data and private information. In the same way that actual wallets are susceptible to theft, e-wallets offer a greater level of traceability if they are tampered with, so are safer in some respects. Transaction limits and velocity checks are used to ensure the e-wallets are used correctly by the right people.
What are the Options for E-Wallets?
The most well-known e-wallet is PayPal, founded in 1998, which used its connection to eBay, from 2002-2015, to establish itself as a viable method of online payment. PayPal is a valid form of payment across the entire retail and services sectors. Those that accept PayPal range from Netflix and Xbox to Spotify, Emirates, Booking.com, and MAC.
Neteller, founded in 1999, is another popular payment system specialising in faster digital payments and also deals in forex trading of other currencies and social network payment transfers. Neteller offers itself as a transfer option for online casino provider Betway, as its functionality works better with the types of transfers the site uses. Neteller is also better placed to offer an e-wallet for trading, such as with XTrade, which deals with CFDs (contracts-for-difference) involved with shares and commodities. HotForex also use Neteller as the forex market benefits from the ease at which transfers can be made throughout the day under time constraints.
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Are E-Wallets the Same as Cryptocurrency Wallets?
Whenever anyone thinks of making payments online, they immediately think of bitcoin, or other cryptocurrency options. While that may be a logical step, it is also a common misconception. Cryptocurrency is stored in a digital wallet, but e-wallets are digital payment and money transfer options funded through tangible money, whereas cryptocurrency wallets offer a storage place for cryptocurrency that can then be traded, bought, and sold on exchanges.
Can I Send Money from My E-Wallet to the ATM?
One aspect that puts people off about e-wallets is the fact that their money may be tied up with the e-wallet and only be able to be spent at merchants offering the service – like a gift card for a specific store. However, e-wallets have the option to transfer money to your bank account, which you can then withdraw from the ATM or spend online as you would with your cash card. The barriers to e-wallets are slowly being broken down and the growth of the digital payments industry shows that more and more people are beginning to see the benefits.
There is no escaping the move towards greater levels of digital payments. Local buses are accepting contactless payments, which can now be made through smartphones, which shows that the way we look at money is changing. The vast scope of digital payments means that they are easier to track and trace, that they can be done multiple times faster and in a more efficient way, and that they offer greater security for the user and peace of mind for the merchant. The exodus of major companies leaving behind traditional payment options and moving towards digital payments and the use of e-wallets just goes to show how important they are becoming.