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Guide to e-wallets

Is an e-wallet what I think it is?

E-wallets are, on the face of it, just what they sound like: the digital equivalent of the wallet you carry in your pocket every day. Like a traditional wallet, e-wallets are a place to keep money as well as all your ID and membership cards. While the average wallet might hold an old tenner, a money-off voucher for the local cafe and a library card, e-wallets are an altogether smarter affair.


What can I use my e-wallet for?

In some of their functionality, e-wallets resemble credit or debit cards. E-wallet users typically load up their wallet with cash, which can subsequently be spent in a number of ways. E-wallets can be used to make online purchases through a mobile or PC browser, and can also be stored on a smartphone and used to pay in physical shops, using NFC payments – better known as contactless payments or ‘wave and pay’.


Are an e-wallet and a digital wallet the same thing?

There's a subtle difference between e-wallets and digital wallets: typically e-wallets are prepaid, whereas digital wallets are usually linked to the wallet holder's bank account or card, with any spending deducted in real time as purchases are made. However, there is some blurring of the definition, with some e-wallets linked to credit or debit cards.


What else can an e-wallet do?

Like physical wallets, e-wallets often hold more than just cash. They can contain the owner’s ID, allowing them to confirm their identity or age for certain online services. And, rather than having to repeatedly fill out forms when making a purchase, owners can use their e-wallets to automatically fill out details – including name, address and other information – whenever they pay.

E-wallets can also be used to store digital versions of loyalty cards, reward scheme points or discount coupons for brands the user regularly interacts with. And, once a purchase is complete, digital receipts can be stored in the e-wallet. It's also possible to create and save digital invoices in some e-wallets, which can be paid later at payment points in shops, or at dedicated kiosks and terminals.

Given the sensitive nature of the data that e-wallets hold, security is paramount for e-wallet services. These services encrypt data to keep it secure in transit, and also use secondary verification and anti-fraud technologies to guard against card misuse.


Who uses e-wallets?

E-wallets are an option for more than just individual use. Groups of people can also contribute to a single wallet – for example, as a way of all contributing towards a shared retirement gift. The funds held within wallets can also be used for making payments – for instance, to business associates or suppliers, or to transfer cash to friends and family.


How can you get an e-wallet?

There are a number of financial services and other companies that currently offer their own e-wallets. Often, a particular brand of wallet is popular in a certain country or region – for example, Yandex.Money or QIWI in Russia, with more than 18 million and 15 million users, respectively. Being virtual, e-wallets have the ability to hold several currencies at once, allowing their owners to make purchases from international sites without worrying about exchange rates.

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Guide to e-wallets
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