Ewallets

An ewallet, or electronic wallet, is a digital tool that stores payment credentials and sometimes funds to enable electronic transactions. They can be mobile apps, desktop wallets, or integrated with card networks. Ewallets can be categorized as closed wallets (issued by merchants for their own products), semi-closed wallets (accepted at a limited set of merchants and do not permit cash withdrawals), and open wallets (can be funded and used broadly, including cash withdrawals and transfers).

Users set up an account, link bank accounts or cards, and/or load funds. Payments are authorized via device authentication and tokenization replaces card details with a secure token. Transactions can be conducted online, in apps, or at physical stores using contactless payments, and some wallets support peer-to-peer transfers and card-free withdrawals.

Benefits include speed and convenience, reduced need for physical cards, broad merchant acceptance, easy transfer of funds, and integration with loyalty programs and rebates.

Risks include security threats such as phishing and device loss, privacy concerns, dependence on internet access and device compatibility, potential fees for certain transactions or cross-border use, and issues around refunds and chargebacks in mobile environments.

Regulation and standards: Wallet providers holding customer funds may be subject to financial regulations, including KYC/AML and consumer protection laws. Payment data handling is governed by standards such as PCI DSS, and in the EU, PSD2 requires strong customer authentication. Tokenization and secure elements reduce exposure of raw data. Examples include Apple Pay, Google Pay, Samsung Pay, PayPal, Venmo, Alipay, and WeChat Pay.