Electronic or Digital Wallet
What is an E-Wallet?
An electronic wallet or E-wallet is defined as an encrypted medium for storage or holding credit card and other confidential financial information that can be used to complete electronic transactions without re-entering the stored data at the time of transaction itself.
Access to an E-wallet requires a password or "keys" for maximum security.
Types of E-Wallets
1. Closed Wallet
A company selling products and/or services can develop a closed wallet for customers. Users of a closed wallet can use the funds stored to make transactions with only the issuer of the wallet. The money from cancellations, returns, or refunds is stored in the wallets. Amazon Pay is an example of a closed wallet.
2. Semi-closed Wallet
A semi-closed wallet allows users to make transactions at listed merchants and locations. Although the coverage area of such wallets is restricted, both online and offline buying can be done through the wallets. However, merchants need to enter into agreements or contracts with the issuers for accepting payments from the mobile wallets.
3. Open Wallet
Banks or institutes partnered with banks issue open wallets. Users with open wallets can use them for all transactions allowed with a semi-closed wallet in addition to withdrawal of funds from banks and ATMs and transfer of funds.