What is a digital wallet?

Electronic payments are becoming popular day by day. Both sellers and customers now depend on the online payment systems, especially after the pandemic. Digital wallets are one of the best and most popular payment methods for managing NFT ownership in the world right now. Digital wallets give the users a lot of payment options such as credit and debit cards for the physical transaction, and also allow you to keep the cash on your phone and make transaction for their NFT business.  

Besides debit and credit cards, you will also get features like gift cards, membership and loyalty cards, NFT coupons, event tickets, plane tickets, and more. So what is this digital wallet all about?

Well, in this article, I will share the entire concept of digital wallets with you. 

What is a Digital Wallet?

A digital wallet can be defined as hardware or software, electronic devices, or online services that lets any person or business do their transactions electronically. It keeps the users’ payment details for various payment ways on different websites with additional pieces of information like gift vouchers and driver’s licenses, etc. This is also known as an e-wallet. It helps you to buy NFT tokens from any site you want.

Normally, a digital wallet is carried in smartphones in the form of applications; there are other forms of digital wallets like a desktop wallet. But the mobile app wallet version is the most popular to use because it is easy and flexible to maintain.

Digital wallets and e-wallets are not just easy to use, but they are way safer in many cases than other traditional wallets. People always find trouble to make transaction for their NFT, but digital wallets help you to complete NFT transaction in just few clicks with complete safety. If you want to use a digital or e-wallet, you need to download the specific app created by the banks or trusted organizations. 

Importance of a Digital Wallet

  • A digital wallet safely reserves all users’ payment details in a locked form. If you use a digital wallet, you can take the leather wallet out of your pocket. 
  • Marketing companies always need to collect their client’s data for their business. A digital wallet can solve this problem easily. Any company can know the purchasing choices and habits of the customers, and this will help you use the proper marketing methods for their products. 
  • If people worldwide start to use digital wallets, it will help the country expand its participation in the global financial markets. 
  • Digital wallets let you transfer money to friends and family living in different countries.
  • People from all over the world are joining the NFT business, so they must have a digital wallet. Without a digital wallet, no one can make transactions and keep the balances of NFT.  

Types of digital wallets

  1. Closed Wallet

A closed wallet is a wallet from which people can do the transaction with specifically selected people or business companies. A company selling products or giving other services mainly uses closed wallets for their customers. People who will use the wallet only can share the wallet’s funds with the issuer. Amazon Pay is an example of this type of wallet. Mainly funds from cancellations, returns, or refunds are kept in the wallets. 

  • Semi-closed Wallet

A semi-closed wallet lets users make transactions at selected retailers and locations. The range area of this wallet is limited. But the good thing is you can make both online and offline transactions through this wallet. 

Every retailer has to sign an agreement or contract with the holder for making the transaction. 

  • Open Wallet

Open wallets allow users to make all types of transactions. Mainly, banks or companies linked with banks use open wallets. It’s easy to use and will enable users to make all transactions like withdraw from the bank or ATM, shopping, etc.

Example of Using a Digital Wallet

There are lots of digital wallets are available in the market. They include, ApplePay, Google Wallet, Samsung Pay, PayPal, Venmo, AliPay, Walmart Pay, Dwolla, and many others. But the top three digital wallets in the market are provided by Google, Amazon, and Apple. Now let’s talk about one of these wallets, for example, Google’s Wallet. The Google wallet permits its users to keep money on their phones. You can use this money in different places like in-store, online at businesses, or any other places that accept Google payments.

Google has recently created a physical Wallet Card like a debit card connected with the Bank of Google.

Google Pay was divided into Android Pay and Google wallet. They recently united their two types of wallets in a single form, and that is known as Google Pay. On the other hand, Apple also partnered with Goldman Sachs to create Apple credit cards and grow its ApplePay services.

How to choose a digital wallet

To use the top digital wallets like Apple Pay, Google Pay are required to use selected devices, I mean phones, to use them. For example, you are not permitted to use Apple Pay on an Android phone. And it’s important because when you’re choosing a specific phone brand, you already choose a specific digital wallet. On the other hand, PayPal is exceptional. PayPal can be used in both Apple and Android phones.  

The digital wallets you’re using also restrict your transaction. Many retailers need specific digital wallets, and also not all accept digital wallets. 

Are digital wallets safe?

New technology, especially related to money, banking, or credit cards, always risks security crashes. But digital wallets are made with a unique feature called “tokenization” that holds your credit or debit card digit secret when you make a purchase.

That means while paying for anything, you don’t have to send your actual credit or debit card number to the seller. Digital wallets give you a one-time PIN made up of random numbers during every transaction. That means your personal information stays protected.

Also, while you want to enter your wallet, you have to pass different layers of security like PINs, passwords, and questions.  

So that’s all for today. I hope you find all the answers of you questions. 

Thanks for reading. 

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