A digital wallet (also known as a virtual wallet or e-wallet) allows customers to store and transfer funds between users without having to transfer money through traditional banking networks.
A virtual wallet can instantly send and receive money countless times without ever leaving the platform. It acts like an online piggy bank where an individual or group of people can contribute money to it. The wallet is then able send that money to one or multiple other wallets, quickly and effortlessly.
By now, most of you would of used a version of a digital wallet – PayPal, Google Pay, Apple Wallet, Venmo.
These are pretty common types of digital wallets allowing a user to load money into the wallet and then use that wallet to buy goods or services through their platforms, peer to peer transfers or across ecommerce.
The benefit being that once the funds are in the wallet, the platform is able to move it around without it being on a traditional banking network, saving time, money and also allowing international transfers instantly.
The user cases and capabilities of a digital wallet allow for some amazing and unique scenarios.
Common uses for digital wallets
- Topping up a public transport travel card or toll account so that when you travel, there are funds available for the provider to take money from.
- A crowdfunded project that receives donations from many individual people that all go into one digital wallet to manage that project.
- Adding funds and into a sporting or betting app, you have a choice of withdrawing the money out or reinvesting back into your next bet.
- Two sided marketplaces – customer buys a T-shirt, pays into a digital wallet, that sends split payments to other wallets for the artist, printer, clothing supplier etc
Why your business should use digital wallets
There are many reasons for a company to use a digital wallet. The more the world moves towards frictionless payment and extraordinary user experiences the bigger the needs:
- Your funds are securely held in a trust account by a third party remove compliance and legislative problems and creating trusted solution.
- Seller will receive their funds instantly, no more waiting days for funds to clear, it will appear in a wallet instantly.
- Multiple payment methods can contribute to the wallet – you’re not restricted to just accepting cards.
- The wallet can pay out to multiple sources with no time restrictions – choose when, how frequently and at what thresholds to payout to bank accounts.
The ability to use a digital wallet is one of the reasons Assembly is the payments platform of choice. While other transactional payments gateways can process card transactions, Assembly’s digital wallet will hold the balance while also ensuring the funds are secure.
May 30, 2018