With the rise in digital technology, one of the most notable developments introduced to the world was the era of Digital Wallets. Digital Wallets in India gained more importance regarding wide usage with the rise in smartphones and better internet access. Most mobile applications have introduced digital payments, making digital wallets the most preferred online payment mode.
During the time of demonetisation in India, digital payments increased. Since then, many platforms have chosen digital wallets as the most convenient payment option. This article will take you through how digital wallets have become a prominent part of our lives and explore what they are all about, their benefits, types, and various uses.
What is a Digital Wallet?
Also known as a mobile wallet or an e-wallet, it is a virtual platform that is a software-based application where users can add, store and transact money digitally whenever there is a payment requirement. Digital wallets in India also serve as a virtual repository that allows various payments by linking their accounts to their banks and mobile applications.
##Importance of Digital Wallet for Online Payments
Thanks to the revolution of digital wallets in online payments, most of the transaction processes have been made easy and hassle-free. Digital Wallets in India have become a great help in the financial part, as one can avoid manually entering the details during payments or visiting the bank to make payments. Digital wallets made it easier and more accessible to all, where one could make instant payments simultaneously.
Digital wallets in India offer robust security measures to protect users’ sensitive information and transaction details. Thus, making it an essential online payment mode, digital payment has been the preferred choice for users and business owners.
How Does a Digital Wallet Work?
Understanding how digital Wallets in India function is essential in grasping its significance in the digital payment landscape. Digital wallets use certain technologies to process payments. So here’s a simplified overview of the process of how digital wallets work and the technologies used:
Registration: Users must download a digital wallet application of their choice based on their usage and register by linking their account to their bank account or payment cards.
Managing Funds: The next step is adding and managing e-wallet. The wallet can also add various funds, such as cryptocurrencies or loyalty points.
Authentication: Digital wallets have strong security measures. Once the account is created, the users will be asked to authenticate their account, such as fingerprint logins or PINS, etc.
Transactions & Confirmation: Once you can make a transaction, you will get a confirmation with a transaction receipt. Digital wallets record transaction history, so users can also go back in time to track their expenses.
Here’s a list of standard technologies used in Digital wallets in India:
Near Field Communication (NFC): This technology uses wireless electromagnetic signals enabled in most smart devices such as smartphones, tablets, etc. Two devices are placed close to each other, allowing to exchange the payment information.
Magnetic Secure Transmission (MST): This technology generates a magnetic signal when someone swipes the card reader or the magnetic strip
QR Codes: This technology uses a barcode, where the user needs to scan this barcode from their phone scanner, and the QR code is generated for that particular payment.
Types of Digital Wallets
There are several types of digital wallets in India designed for users based on their requirements and usage as follows:
Closed Wallet: A specific company or service provider offers this wallet and, can only be used for transactions within the provider’s ecosystem.
Semi-Closed Wallet: They are used for a broader range of transactions with fewer withdrawal limitations to a bank account. They have both online and offline purchases.
Open Wallet: Open wallets have flexible coverage. They allow users to store funds and make payments across a wide range of merchants and service providers and can be linked to multiple sources, such as payment cards and bank accounts.
Benefits of using digital wallets over traditional payment methods
Security: Ensures more secure payment methods by protecting users’ data through advanced encryption and authentication measures
Quick Transactions: Reduces checkout times and enhances hassle-free shopping experience by instantly making payments faster.
Multiple Transactions: Allows users to switch between cards or accounts and can add multiple payment methods in just one e-wallet.
Convenience and Accessibility: Reduces the chance of carrying debit/credit cards and calls and is easily accessible 24/7 through smartphones.
Rewards and Discounts: As one makes transactions through digital wallets, it offers cashback rewards, discounts, and loyalty programs.
Uses of Digital Wallet
Digital wallets in India can be used for various types of transactions, making the whole digital payment process smooth and hassle-free:
Online Shopping: Digital wallets simplify the checkout process for e-commerce websites and mobile apps.
Bill Payments: Digital wallets make it easier for users to make recurring payments directly and instantly for utility bills, mobile recharge and other charges.
Ticket Booking: This can be used to book flights, trains, buses, and movie tickets online instantly by avoiding long waits in queues and buffering or network issues (done till here)
Food Delivery and Dining: Payments have been made easy, and one can avoid waiting in long queues as most dining and delivery apps now accept payments via digital wallets.
Transfers to Other Individuals: As digital wallets are easily accessible to many, users can send money to friends and family instantly through digital wallets.
In-Store Payments: Since the increase in online payments, physical retailers now accept digital wallet payments.
Travel Expenses: Using digital wallets is handy for paying travel expenses such as hotels, taxis, and other costs.
Conclusion
Digital wallets have significantly changed our lives as they have helped us manage and transact money digitally at our convenience. Due to their incredible benefits, digital wallets in India have become an integral part of our lives. From shopping to paying utility bills to making payments to official sites, you name it, all-digital wallets have paved a better way with promising financial payment modes, shaping the future.
FAQs About Digital Wallets in India
1. How to download a digital wallet?
To download a digital wallet:
Visit your device’s app store based on your phone model, such as Google Pay for Android users.
Find and download the digital wallet app of your choice.
Once installed, create your e-wallet account and use it as per your usage.
2. How to make payments using a digital wallet?
To make a payment, select the wallet as your payment option at checkout, authenticate the transaction, and confirm payment details. Once the authentication is verified, the wallet securely sends the amount with payment information.
3. How to add money to a digital wallet?
You will find an option “Add Money” or “Load Funds” within your digital wallet app. Choose your preferred payment source, enter the desired amount, and confirm transaction details. Once verified, the funds will be added to your digital wallet. Some steps could vary by wallet apps.
