automatically trigger a payment via the user’s preferred payment instrument to collect the outstanding payment amount.Īnother variant of pay-by-mobile-wallet would be direct carrier billing, where the amount of the purchase is added to your mobile phone bill. Once the wallet is online again, it syncs available funds and if there is not enough prepaid balance, it can e.g. via reading the last known prepaid balance) or it can fully skip the check, depending on the payment amount and risk scoring of the user. The wallet can check offline if the user has enough funds left to conduct the payment (e.g. For this purpose, the POS interacts with the secure element of the mobile phone via Near-field Communication Technology (or in the case of older POS systems Magnetic Secure Transmission Technology).Ĭertain mobile wallets are able to execute payments at a point-of-sale without an internet connection. Users can simply pay with their mobile wallets at points-of-sale. The cards can exist as traditional plastic cards outside the wallet, too. The card data is stored on the special chip of the mobile device called secure element. This is not wrong as mobile wallets indeed enable digital payment, but it falls short.Īs a basic functionality, mobile wallet solutions hold credit and debit card data and can be used for payment. We also see “e-wallet”, “digital wallet” and “mobile wallet” getting thrown around as synonyms. The term “mobile wallet” is often used to refer to very different wallet applications. They operate offline, typically on a USB stick.Ĭertain crypto wallets are also capable of processing payments with cryptocurrencies. To provide additional safety, so-called hardware wallets or cold wallets exist. The keys act as certificates of ownership for cryptocurrencies, which are stored on the blockchain. This specific form of an e-wallet stores public and private keys of a user. The good thing is that custom-tailored e-wallets based on a flexible software foundation are always an option. It should seamlessly integrate into your software landscape. This will help you when deciding on which e-wallet you want to integrate into your services or e-commerce platform. It’s this use case that we will go into more detail on below. Many such stored values only circulate within a closed loop, so the values can only be spent in certain contexts, like on specific e-commerce platforms.Īt trimplement, our expertise lies with digital wallets as defined in this paragraph. Take loyalty points or even strictly informational data like coupons or discount codes, for example. In the area of microfinancing, e-wallets have become a staple for many small businesses.įinally, certain digital wallets store assets other than fiat currencies. Some banks also offer custom digital wallet apps with features like budgeting or alert notifications. Popular examples are PayPal or Amazon Pay. In addition, they can pay for e-commerce purchases either using available e-money or by charging a stored payment instrument. There, users can top up or withdraw from their e-money balance using payment instruments stored in the e-wallet. Following our definition, digital wallets are typically web applications that can be accessed from any device that’s able to connect to the internet.ĭigital wallets are part of a central web platform, run by the wallet provider. For our purposes though, we want to present digital wallets or online wallets as a subcategory, to better differentiate them from electronic wallets as a basic concept. That’s why many use the terms e-wallet and digital wallet synonymously. This type of e-wallet is regarded as the “standard” use case. Different types of e-wallets store and process different types of data or assets. For example, there are wallets which function as NFC payment apps at points-of-sale and also as payment instruments for e-commerce platforms. Specific e-wallets can comprise functions from more than one of the categories presented here. Of course, the classifications below will sometimes overlap. All of them act as umbrella terms for very specific wallet configurations, which may vary according to a number of criteria. With regards to data: We will see that most e-wallets process similar data sets.īasically, we can identify 4 basic types of electronic wallets: Digital Wallets, Crypto Wallets, Mobile Wallets and IoT Wallets. Following our initial definition, we can distinguish those wallets by their software and devices they run on. Out in the wild, different types of e-wallets contrast in composition and functionalities. There is no single definition of e-wallet.
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