Five Benefits of Using Digital Wallets for Money Transfers
Digital wallets (or e-wallets) are routine in making online payments, sending money abroad, or splitting expenses. Because they are convenient, fast, and easy to use, e-wallets have rapidly been adopted as a means of payment by both consumers and businesses.
Continue reading below to learn how e-wallets work, their benefits, and what the future holds for e-wallet payments.
What is a digital wallet?
A digital wallet (also called an electronic wallet or e-wallet) is a payment method that enables people to make money transfers without using cash or physical payment cards.
In its essence, an e-wallet is a web or mobile application that stores payment information so you can make transfers more quickly and easily.
Because they don’t require you to enter personal or payment details at the time of making a transfer, e-wallets are also more secure than traditional payments alternatives. They’re also a preferred payment method for online shopping because they enable a fast and hassle-free checkout process.
You can learn more about how digital wallets work here.
Countless e-wallets are available today for payments and transfers globally (for example PayPal, Google Pay or ApplePay), while others specialize in serving specific regions: Alipay and WeChat in Asia, M-Pesa in Africa, PagSeguro in South America.
The benefits of transferring money with e-wallets
Using a digital wallet for money transfers offers a number of advantages compared to other options.
E-wallets enable consumers to store their favorite payment methods in one place, including credit cards, bank accounts, gift cards, and more. This eliminates the need to use several money transfer or banking applications, making it easy to send transfers quickly, from anywhere and anytime.
2. Lower costs
Digital wallets usually have small to zero transaction fees, making them a competitive alternative to traditional money transfer methods. The low costs are a major advantage in the case of international transactions or frequent transfers.
3. Faster transactions
With a digital wallet, users only need to log in to the wallet app in order to make a money transfer, without having to manually introduce payment details. This streamlined process, along with quick delivery (instant or less than 24-hour transfer settlement) make digital wallets a superior option to methods like bank transfers.
Digital wallets provide an additional layer of security because card data or bank account information are never disclosed when making a transaction. In addition, the majority use security mechanisms such as encryption, biometric authentication, and 3DS verification to protect users from potential fraud and data breaches.
5. Peer to peer transfers
Because consumers increasingly prefer digital wallets over cash, e-wallets are also a favorite way of transferring money between individuals. With their transaction speed, low costs, and ease of use, they’re one of the easiest ways to share costs, split bills, or send international remittances.
What’s next for e-wallets?
In 2022 there were 3.4 billion digital wallet users globally and that number is expected to increase by 50% by 2026.
But the rise of digital wallets and alternative payment solutions also requires simplification. The more payment methods become available, the more consumers and merchants will need a way to manage these methods easily and in one place.
Just like banks communicate transfers over SWIFT or consumers and merchants communicate via payment networks (Visa/Mastercard), Fin.do can serve as a communication protocol between payment solutions (existing or emerging).
Fin.do already provides instant communication between payment cards and is working on becoming the interface between payment systems and methods including e-wallets, banks, cards, and more.
To both consumers and merchants, Fin.do can act as an instantaneous way to send transfers, exchange currency, and accept payments regardless of the payment methods involved in the transaction.
Fin.do is currently adopted by consumers worldwide as an instant, secure, and simple way to send money internationally between cards.
Learn more about how Fin.do works.