by A digital wallet also known as “e-Wallet” refers to an electronic device, online service, or software program that allows one party to make electronic transactions with another party bartering digital currency units for goods and services. This can include purchasing items on-line with a computer or using a smartphone to purchase something at a store. Money can be deposited in the digital wallet prior to any transactions or, in other cases, an individual’s bank account can be linked to the digital wallet. Users might also have their driver’s license, health card, loyalty card(s) and other ID documents stored within the wallet.
The credentials can be passed to a merchant’s terminal wirelessly via near field communication (NFC). Increasingly, digital wallets are being made not just for basic financial transactions but to also authenticate the holder’s credentials. For example, a digital wallet could verify the age of the buyer to the store while purchasing alcohol. The system has already gained popularity in Japan, where digital wallets are known as “wallet mobiles”. A cryptocurrency wallet is a digital wallet where private keys are stored for cryptocurrencies like bitcoin.
E-wallet is a type of electronic card which is used for transactions made online through a computer or a smartphone. Its utility is same as a credit or debit card. An E-wallet needs to be linked with the individual’s bank account to make payments.
E-wallet is a type of pre-paid account in which a user can store his/her money for any future online transaction. An E-wallet is protected with a password. With the help of an E-wallet, one can make payments for groceries, online purchases, and flight tickets, among others.
E-wallet has mainly two components, software and information. The software component stores personal information and provides security and encryption of the data. The information component is a database of details provided by the user which includes their name, shipping address, payment method, amount to be paid, credit or debit card details, etc.
For setting up an E-wallet account, the user needs to install the software on his/her device, and enter the relevant information required. After shopping online, the E-wallet automatically fills in the user’s information on the payment form. To activate the E-wallet, the user needs to enter his password.
Once the online payment is made, the consumer is not required to fill the order form on any other website as the information gets stored in the database and is updated automatically.
E-wallet has mainly two components, software and information.
Software component stores personal information and provides security and encryption of the data whereas information component is a database of details provided by the user which includes their name, shipping address, payment method, amount to be paid, credit or debit card details, etc.
Types
There are two types of digital wallets: hot wallets and cold wallets. Hot wallets are connected to the internet while cold wallets are not. Most digital wallet holders hold both a hot wallet and a cold wallet. Hot wallets are most often used to make quick payments, while a cold wallet is generally used for storing and holding your money, and has no connection to the internet. Another difference that is apparent when comparing the types of digital wallets, or e-Wallets, is the price. While most hot wallets are free, cold wallets can be expensive.
Security
Along with their different capabilities, these two types of digital wallets also come with a difference in security considerations. As a hot wallet is connected to the internet, they are more susceptible and vulnerable to cyberattacks from hackers. This makes them less secure and open to attack. On the other hand, cold wallets, are much more secure as they do not have an internet connection.
ECML
Digital wallets are designed to be accurate when transferring data to retail checkout forms; however, if a particular e-commerce site has a peculiar checkout system, the digital wallet may fail to properly recognize the form’s fields. This problem has been eliminated by sites and wallet software that use Electronic Commerce Modeling Language (ECML) technology. Electronic Commerce Modeling Language is a protocol that dictates how online retailers structure and set up their checkout forms.
