Digital wallets why are they important for financial stability

In the digital world we live in, we hear a lot about “digital wallets” or ”e-wallets”. But, what is the “digital wallet”? What benefits does it offer to its users? What are its advantages? Why are they essential for financial stability? Here are some answers.

What is a digital wallet?

With the explosion of online shopping, new payment methods other than traditional bank cards have developed. Among these new features is the digital wallet or e-wallet.

This is an excellent tool for financial inclusion. 

The digital wallet allows you to make your purchases and other payments without cash. This tool is important on several levels. It not only allows rapid execution of commercial transactions but, above all, guarantees certain transparency for worldwide economies.

The digital wallet is a system or application where personal data (contact details) and bank data (bank card number, expiration date, visual cryptogram, etc.) are stored. It is necessary to register at least one payment instrument in the electronic wallet to settle the purchases.

When paying online, all you have to do is enter a username and password, sometimes accompanied by sending a code by text message (one-time code). 

The advantage lies in the possibility of not entering your full contact details for each transaction, of not giving the merchant their bank card number directly, thus theoretically limiting the risk of fraud. The only downside could be that the operator who manages your electronic portfolio has access to your sensitive data.

Digital wallets and blockchain technology

The future may be likely to be turned upside down by a technology called Blockchain. This innovation is the very expression of transparency. The Blockchain is now considered by many specialists as the “second Internet revolution.” 

This revolution will enable the internet to achieve its primary objectives, such as enabling everyone, wherever they are and at any time, to communicate, do business, make financial transactions despite cultural and territorial barriers. 

However, given the great openness and transparency enabled by the Blockchain, many national governments do not readily adhere to it. But, to be afraid of the Blockchain is to show a lack of transparency. Real democracy is the Blockchain. Blockchain technology will open up bigger and better prospects for digital wallet users and their daily activities. 

Advantages of digital wallets

The digital wallet has the significant advantage of greatly facilitating online payments. It simplifies shopping by making it possible to pay for any product or service free of charge with just a few clicks.

In addition to the speed of transactions, the digital wallet is much more secure and limits the risk of fraud. In fact, when you pay with your bank card online, you send all your information to the merchant. It is very easy for malicious individuals to use it to defraud you.

 The use of digital wallets enables many people worldwide to take part in trading on financial markets and be part of the digital and economic revolution. As digital wallet users, you could receive payments from friends via various services without an intermediary like a bank. If you wish to trade crypto, you can store it safely and efficiently and access your digital assets via your phone to pay for goods and pay for services. It’s an excellent way to make transactions in cryptocurrencies.

Finally, in a world where ecological awareness is becoming more important, the e-wallet represents a rather interesting alternative. When you know the amount of plastic needed to make credit cards and how difficult it is to recycle them when they are expired, it is reasonable to think that the electronic wallet is a real green solution.

This is a contributed post and therefore may not reflect the views and opinions of this blog or its author.