Contactless payments are increasingly popular and e-wallets or electronic wallets are one of the newest payment technology products that offer the convenience of cashless transactions via computer or smartphone.
Its use is similar to a credit or debit card, but the method is slightly different. Come on, find complete information about what an e-wallet is, how it works, advantages and disadvantages, and its benefits for business in this article!
What is an e-wallet?
According to Investopedia, an e-wallet is a software or application-based payment system that connects to a mobile device or computer—instead of a physical card. The electronic wallet itself stores payment information and passwords which are kept secure and confidential.
Some of the technologies now used by mobile devices and e-wallets are:
- Quick Response (QR) Code is a bar code in the form of a matrix that stores information and can be scanned via a camera or scanner to initiate payment.
- Near Field Communication (NFC) is a technology that allows two smart devices to connect to each other and transfer information by utilizing electromagnetic signals. However, the two devices must be close to each other to connect.
- Magnetic Secure Transmission (MST) is a mobile payment technology introduced by Samsung, whose technology can accommodate old terminals that still use a magnetic system as well as new terminals that already use chips.
How Do E-Wallets Work?
In principle, e-wallets work the same as physical wallets, only they are cashless and cardless.
However, functionally e-wallets can also store data such as loyalty points, digital coupons and other important information. This payment method is considered safe, both for online purchases and in physical stores.
It is also real time, where your balance will automatically decrease as soon as the payment is received by the merchant. Well, e-wallets themselves are often used together with software or applications to facilitate payments via smartphone.
Types of E Wallet
If you don’t know, electronic wallets have several different types. Check out the following description.
1. Open Wallet
This type of e-wallet is usually issued by banks to their customers. This payment technology allows users to transfer funds or withdraw money in cash at ATMs. Examples are Livin by Mandiri and Wonder by BNI.
2. Semi-closed Wallet
While semi-closed wallets allow users to receive money into their bank accounts but not cash withdrawals. Users can also transfer funds to other users from the same payment portal. Examples are OVO, Dana, LinkAja, and Go-Pay.
3. Closed Wallet
Lastly, there are closed wallets which are issued by private companies or traders to allow their customers to make direct purchases of goods or services provided by the issuing party. Funds stored therein cannot be transferred to a bank account and cannot be withdrawn from an e-wallet. An example is iSaku from Indomaret.
Pros and Cons of E Wallets
To this day, the pros and cons regarding e-wallets are still ongoing. Here are some of the things that resonate most often.
Advantages of e-wallet as a payment method:
- Offers comfort, convenience and speed in transactions.
- Apply advanced technology to protect money and personal information. In addition, the transactions you make are encrypted and protected by a password or PIN code.
- Helps you track expenses so you can manage your budget better.
- Provides access and provides funds instantly, anywhere and anytime—perfect for cashless people.
- Provides configurations that can be adjusted to suit the needs and preferences of the user.
General disadvantages of e-wallets:
- Not all places provide payment by e-wallet.
- It doesn’t work if you run out of battery or aren’t connected to the internet.
- To this day, security risks are still an issue that cannot be completely avoided.
Benefits of Accepting E Wallet Payments for Businesses
Regardless of the opinion of people who reject e-wallets. In fact, GoodStats noted that 96 percent of Indonesians already use e-wallets for transactions. Meanwhile, 3 out of 5 people adopt a cashless lifestyle according to the findings of the Visa Consumer Payment Attitudes Study.
This shows that you need to provide an e-wallet payment method for your business. The benefits if you accept e-wallet payments are as follows:
- Reduce transaction barriers and provide customers with flexibility to make payments.
- Make it easy for cashless customers to complete their transactions.
- Reduce the risk of customers canceling purchases because you don’t provide a cashless payment method.
- Allows customers to spend more because they don’t worry about not having enough money.
- Facilitate an easy shopping experience that leaves a positive impression in the minds of customers.
- Speeds up the queue because the payment process is faster and there is no need to look for change.
- Reduces the risk of employee miscalculations and fraud because the money will go into the business account.
- Helping businesses collect consumer data and understand their habits so they can create more effective business plans.
Itulah informasi seputar e-wallet dan manfaatnya untuk bisnis. Bagi kamu yang juga ingin menerapkannya, segera download aplikasi Labamu dan buat sendiri QR Menu.
Not only that, there are many other features that you can use to support business operations. There is POS cashier, order management, product catalog, sales reports, employee data, financial reports, raw material management, and many others.
It is proven that 84,000+ entrepreneurs in Indonesia have joined and experienced the convenience. What are you waiting for? Come on, download the application immediately via Google Play or the App Store!
