E-WALLETS

E-Wallet
•A digital wallet refers to an electronic device that allows
an individual to make electronic commerce transactions.
This can include purchasing items on-line with a computer
or using a smartphone to purchase something at a store.
•An encrypted storage medium holding credit card and
other financial information that can be used to complete
electronic transactions without re-entering the stored
data at the time of the transaction.
Basic Concept
•Encryption software that works like a physical wallet during
electronic commerce transactions.
•A wallet can hold a user's payment information, a digital certificate
to identify the user, and shipping information to speed transactions.
•The consumer benefits because his or her information is encrypted
against piracy and because some wallets will automatically input
shipping information at the merchant's site and will give the
consumer the option of paying by digital cash or check.
•Merchants benefit by receiving protection against fraud
Technologies
•Client Side Wallets:
•Digital wallets are stored on the client side and are easily self-maintained
and fully compatible with most e-commerce Web sites.
•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.
•The information component is basically a database of user-input
information.
Process of an e-Wallet Transaction
Types
•Digital wallets are categorized into three kinds:
•1. Closed Wallet: A closed wallet is issued by a company to a consumer for buying goods and
services exclusively from that company. E.g. Flipkart, Oyo rooms, Ola(Now they are upgraded
to Semi Closed) are some of the examples of the companies using closed wallets.
•2. Semi-Closed Wallet: A semi-closed wallet can be used to buy goods and services, including
financial services, at clearly identified merchant locations or establishments, which have a
specific contract with the issuer to accept the payment instruments, but this still do not permit
cash withdrawal or redemption by holder. Eg. Paytm, PayU, EKO, etc have PPI(to know more
about PPI -Prepaid Payment Instruments in India) license for opening and using Semi Closed
wallets.
•3. Open Wallet: Open wallets can be used for purchase of goods and services including financial
services. It can also be used for funds transfer or POS terminals that accepts cards and also for
cash withdrawal from ATM. Eg. MasterCard, VISA, RuPay, etc provide open wallet services to
issuers(Banks).