Methods for service and product payment evolve quickly in the ecommerce world. Through constant innovations, payments become more efficient and convenient for buyers using online platforms. Sellers gain, too, with improved navigation systems for processing that help bridge differences in currencies, taxation laws, and the transfer of funds. Perhaps the most popular method that provides both buyers and sellers with a streamlined, no fuss payment experience is through various “wallets.”
1. What Is an e-Wallet payment and how does it work?
The e-wallet definition is exactly what it sounds like: an electronic wallet. This digital payment system keeps track of the buyer’s payment information. When a consumer approaches the payment page on a site or an app, the e-wallet can supply the payment information on the spot for immediate, straight forward transactions. Consumers can set up an e-wallet account that’s available any time.
Some items that might be stored in an e-wallet account are credit card data, debit card data, banking information, and payment platform connectivity, such as PayPal. This saves the buyer from fetching their physical wallet and cards. It’s convenient and fast. Different e-wallets are used for different circumstances, different types of businesses and different types of consumers. Now that ecommerce is a global sector, companies and consumers alike do well to utilize e-wallets in the marketplace.
2. Types of e-wallet in the market
Not all payment systems are the same. As technology evolves, the lines between different payment systems become more clearly defined. Though e-wallets or digital wallets are used broadly, there are three different types of e-wallets in the ecommerce space: e-wallets, digital wallets, and mobile wallets. They can and often do overlap in capabilities, but they don’t all do the same things. Function and purpose are the drivers between which type of wallet is needed.
While mobile apps are engineered differently than websites, it’s possible that some solutions work both online on a computer, as well as on an app. A prime example is PayPal, which is used both for personal purchases and as a business ecommerce solution. Amazon also rounds out one of the top e-wallets, in addition the powerful Google.
3. Difference between a mobile wallet, an e-Wallet, and a Digital Wallet
Digital wallets are simply technologies that hold the purchasing information a consumer will need to access when making an online purchase. Digital wallets are typically used online, but some do function on device apps as well. These are some that are used broadly, as with Google that works on its phone, tablets, and online for ecommerce. Others are more specific and cater to their own business, which usually is used in an app form.
Strictly app based wallets are called mobile wallets. These apps live on phones, tablets, and any other mobile device. These wallets typically link with the device and its capabilities, for example Apple Pay or Android Pay each have their own e-wallet system unique to their device. Mobile wallets are a fast-growing payment option. Analysts predict that Latin America will reach a Compound Annual Growth (CAGR) of 16.4% by 2025. Based on the analysis, mobile wallet payments will have an increased CAGR of 15.7% value between 2018-2025. To learn more about the popularity of mobile wallets in Latin America, read an article here.
An e-wallet does a little bit of everything, but the main difference is that an e-wallet can store a balance. A prepaid wallet is an effective solution for unbanked countries. By the same token, e-wallet payment is a secure method for sellers since payment is guaranteed. Funds may be deposited from a bank account or cash to maintain this credit, but sometimes it may be in the form of cryptocurrency. E-wallets can also be used like a digital wallet in which it accesses payment information for a purchase. E-wallet can be used in so many ways that it's become the general term for all wallets, even though they all differ.