The 2016 Banknote Demonetisation in India set the stage for the unprecedented upsurge in the use of digital wallets or e-wallets in the country. With the government’s policies in favor of a cashless economy, transactions over e-wallets have increased, providing convenient, secure, and traceable digital payments for scores of Indians. Over the last two years, the e-wallet boom has made its adoption a matter of necessity rather than a passing trend. Some estimates predict that by 2020, there will be 726 billion transactions completed over digital payments!
The idea behind e-wallets
The idea behind how e-wallets work depends on the storage of payment information of a consumer in a secure and compact manner. E-wallets provide a treasure trove of available consumer data. With this information, businesses can further analyze the spending preferences of a person.
What is an e-wallet?
E-wallets employ near-field communications technology to make transactions quick, simple, and safe. Digital wallets that use the interface of a smartphone and an application-based payment technology are called mobile wallets.
How e-wallets work
Most digital wallets have smartphone apps. Suppose you want to pay for something at a supermarket, provided that the business establishment accepts the e-wallet payment, all you have to do is to tap your phone. Voila! Your payment will be processed in an instant. You do not have to carry physical cash or cards, which are liable to be stolen or misplaced. For e-wallets that are not app-based, all you have to do is furnish personal information, such as your mobile number or a secret PIN number.
How digital wallets work
Let’s have an in-depth, detailed look at how digital wallets work and how a person sends and receives payments with this fintech innovation.
- Before you set up a digital wallet, learn about the credibility of the company offering the service by checking RBI’s certification of the company. By starting the process of setting up an e-wallet, you trust that the banking information you share will remain secure. This security of the data extends to company archives in addition to the data on your own smartphone. Firstly, you will have to submit your bank and card details. It will be used to draw funds and transfer them to the digital wallet.
- It is not necessary for many e-wallets to have anything akin to a minimum balance. The amount of money that you want to keep in your e-wallet depends entirely on you.
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