Advantages and Disadvantages of Digital Wallet
E-wallet or digital wallet is one of the revolutionary payment concepts of this century. Thanks to the evolving technology that the world today doesn’t have to rely on cash anymore. Users can make purchases and payments through their smartphones and computers sitting on their couch. The 21st-century users are so delved into the technological advancements to notice the downsides of e-wallets. These Advantages and Disadvantages of Digital Wallet investigate furthermore.
What is digital wallet or e-wallet?
A digital wallet refers to an online app or service using which you can purchase things or pay for the services. Consider having a real wallet that carries paper money to take care of all the expenses incurred every time you buy something or pay your bills.
A digital payment service or gateway works exactly like real cash; the only difference is, you need to authorize the payment via internet-connection. Mobile wallets, Debit/credit cards used for transactions and payments are different types of digital wallets.
What are the advantages of digital wallet Apps?
Convenience is what leads to new inventions; digital wallet is also one such concept that eventually has transformed the way people conduct businesses. Whether personal or official, billions of users worldwide have plenty of advantages of digital wallet apps and services. Some of them are mentioned below.
1. Instant and Hassle-free transactions
Consider having a one-stop solution for payments and purchases rather than having a wallet loaded with cash and cards. A digital wallet benefits in reducing the extra weight in your pocket. Forget about counting and calculating the cash as you can get things done from your mobile via a one-tap solution.
Many e-wallet services these days operate through a secure payment gateway encrypted by a QR code. All you have to do is scan the code and enter the security PIN. That’s probably it, and your transaction is done within seconds.
2. Incentives for Customers
Every bank would want their customers to pay through third-party services such as digital wallet apps. There’s a lot of difference between doing transactions manually and automatically. With automated payment systems, banks can work efficiently, relying more on centralized electronic payment systems.
Many payment apps offer cashback and rewards to users to encourage them to transact electronically. It not only saves you time but also lets you save tax on every transaction you have to pay on every Debit card transaction. Whenever you load money to your wallet or recharge your prepaid cards, the chances are you may have to incur a relatively small fee.
3. Use a card as you like
Sometimes, you might need to pay for specific services or goods through a specific card type (Mastercard or VISA). You have the liberty to use whatever type can save you more. Having the freedom to use appropriate payment methods is one of the greatest advantages of digital wallet service.
If there is more discount or money-back guaranteed on VISA, you might as well want to use VISA instead of Mastercard. Many retailers and grocery stores also reward customers with points and coupons upon purchase of a specific amount.
4. Better Security
Carrying a wallet on your phone ensures that even if your real wallet goes missing, you can walk without any trouble. A smartphone can get lost or stolen, but remember they are locked with security PIN or biometrics, unlike your wallet loaded with real cash.
Even if your phone is stolen, you can re-register or change your login credentials once you are aware of the mishap. Most of the e-wallet apps and services run on a secure and encrypted channel to ensure user-safety.
5. Digital Wallet is built for Multi-purpose services
You can book flight tickets, movie tickets, pay your electricity bills, loans, and even pay for groceries using a unified payment service. Most retailers and grocery stores have introduced centralized payment services allowing customers to transact through different types of cards.
Compared to the traditional payment systems, e-wallet stands tall when it comes to saving time and availing accessible discounts on purchases and payments.
What are the Possible Disadvantages of Digital Wallet Apps and Services?
Although revolutionizing, the digital wallet has its limitations and downsides. Exploring the flipside of digital payment gateways, you will probably find the following flaws that count as Disadvantages of Digital wallets apps.
1. Your digital wallet may work locally
Unlike traditional banking services, your e-wallet service may not be able to work in different locations. Given that every country has its payment and transactions protocols, the cards and apps that work perfectly in your country may fail in other countries.
Failure to accept a specific digital wallet service is one of the biggest disadvantages of digital wallet service you may encounter while shopping away from your place. Ultimately, the actual cash in your wallet might come in handy.
2. Concerns About Cyber-Security
Every single transaction is carried out online, and you never know whether your bank details are safer online or not. Every now and then, there is a report of hackers breaking into unhackable payment systems. You are not only prone to cyberattacks; if someone gets access to your smartphone, they can jeopardize your financial information quite easily.
As of recent years, scammers and cybercriminals have found social engineering as their signature to lure people into speaking out their banking details so they can launder money through tech-support or gift card scams. Let's not forget that it all happens digitally.
3. Remote areas still Rely on Cash
Supermarkets and malls are yet to make it to the far-flung areas. This means, you still have to travel to such places with cash in your wallet (the real one). Transacting through cash has always been a traditional way to sell ad purchases.
Things may take time to change, but you’ll have to make work with it while travelling to the remotest places in the countryside.
4. No internet will make things worse
With more reliance on IoT and digital payment methods, you may have to face the bitter truth when things go topsy-turvy with your internet connection. Since every digital payment gateway relies on internet speed, a wrong network can make your experience even worse while trying to transact through digital wallet apps.
With such disadvantages of Digital wallet, you might think having cash is a better option.
5. The Dependency on Digital Devices
The world is already sunk in smartphones and IoT; given that you can only use Digital Wallet online via Laptops, smartphones, and tablets, you are more likely to spend more time with digital devices.
Digital wallets doubtlessly make transactions easier, faster, and safer. As the world progresses towards technological transformation, we are more likely to witness more advancements in the existing payment systems. A Digital wallet is something everyone is going to get familiar with within the coming years and as of now, keeping some cash for a backup seems like an amicable move.