What are E-Wallets & How Do They Work?

E-wallets are digital accounts issued and managed by payment providers, either connected with a Virtual IBAN number for dedicated client’s use or under a master account managed by the provider. An e-wallet is a simple online payment tool that works through online portals on our devices or like an app on our laptops, smartphones, smartwatches, and tablets. Furthermore, e-wallets can be connected to virtual or real plastic cards, enabling their use of them by individuals or individuals linked with a legal entity.  A one-time password (OTP) is generated, and users can review their accounts through the online portal, using unique credentials, their OTP, and the necessary information to start using their e-wallet. The information is encrypted, and only authorized users can use the e-wallet and make authorized transactions and payments.

E-Wallets are Gaining Popularity

Even before the pandemic that sparked the use of online payments due to lockdowns and the growth of e-commerce, e-wallets were already becoming increasingly popular, especially among young people. In a digitalized world where most businesses operate online, consumers find it extremely easier to make purchases without having to withdraw cash from ATMs. In fact, more than 2 billion people worldwide used online payments in 2021, while the revenue from such payments reached an astonishing $1.3 trillion in 2020. Additionally, we observe that when young adults are casually sharing a meal, lodging, or going on vacation, they find it more convenient to make peer-to-peer payments via mobile payments.

Due to the exposure on social and traditional media through awareness campaigns, e-wallets have gained popularity and consumers are becoming more and more interested in this convenient payment tool. However, not all e-wallet providers are reliable, and not everything we see in an advertisement is true.  Consumers should carry out thorough research before deciding where to “issue” their e-wallets, as not all providers are regulated by legal authorities. 

Every day, more and more businesses, brands, retailers, stores, and even state authorities are accepting e-wallet payments, which has convinced consumers that e-wallets can be a trustworthy payment tool. Numerous businesses have already noticed the benefits of e-wallet payments, and, for this reason, they have integrated them into their systems to facilitate their customers and clients.  

Besides, one of the greatest advantages of e-wallets is that they offer modernized, streamlined procedures as they do not require entering credit card information into a website for online payments or filling in documents. As a result, it’s no surprise that the demand for e-wallets has increased along with the growth of e-commerce.

Secure, Flexible & Convenient 

Digital wallets were developed not only to make our lives easier, but also to enable multiple functions across many countries and currencies. Multi-currency e-wallets enable international businesspeople and individuals who move from country to country to keep all their funds together and secure no matter where they are. Users can make and accept payments from suppliers, affiliates, employees, and other users worldwide. Furthermore, e-wallets provide convenient solutions for businesses as they allow the use of multiple wallets to easily manage their cash flow from one or more accounts. Users can also connect their e-wallets with corporate accounts or prepaid/debit cards for more flexibility. 

Whenever you use your e-wallet your information is secure in a central location. E-wallet transactions are protected by multiple layers by the online platform and the bank that issued the digital card. And this is the reason why e-wallets are far more secure and convenient than physical cards. 

Using an e-wallet in today’s hectic world will save you precious time, as you can make a purchase or a transaction in a few seconds. Businesses that operate with e-wallets lower their costs as they do not need intermediaries, and they strengthen their business model to sustain competitive advantage in a rapidly changing world. 

Modernize your corporate and personal finances with Sepaga’s innovative e-wallet that keeps your payments, connections, and transactions secure under one roof.