Digital Wallet - Definition & Components (2024)

A wallet is used to hold vital personal documents that may include among others identification documents and cash. The digital wallet is a modern technological model that allows the holder to make online transactions that include making purchases at online stores, paying for services and linking to individual bank account from a mobile device.

Technological composition of the digital wallet is made up of three important components. These components are:

• The system – This is the platform on which the wallet is created. It includes the linkages that act as servers and the infrastructure that s created to support the system functionality.
• The application – This refers to the software created for use. It is normally an easy and interactive program that is easy to operate while at the same time offering maximum security for individual information.
• The device – Unlike the traditional wallet, digital wallet requires a device to operate. This should be a device enhanced with computing capabilities and, therefore, includes a range of hand held mobile phones, iPhones, laptops and other personal computing devices.

Traditional shopping is littered with loads of frustrations. This is more so when there are forms to be filled out in regard to billing information, shipping addresses and other information that maybe required by the merchants. While this may push away majority of the shoppers, digital wallet offers an easy to use the experience that is hassle free. This is made possible by the fact that individual information is stored within the wallet and is securely transferred to the merchant sites while making the transaction. This is done through a secure and encrypted system hence giving maximum protection against fraud.

Digital wallets are created through the use of Electronic Commerce Modeling Language. This makes the wallet recognizable in most of the outlets irrespective of the type of merchant from whom purchases are being made. This is a standard language used by various digital wallet vendors and one used by a majority of major corporations. This makes it acceptable across the board and in such way ability for card holders’ to use their wallets in different outlets.

In most instances, wallets are made available free of costs. It is the merchants who bear the cost of making transactions using the wallets. This is made a deal between the merchant and the vendor on the rates that will be applicable to any transaction made successfully through the use of the wallet. The common models include charging at a flat rate for any transaction or a percentage of the amount involved in the transaction.

While shopping can be an exiting experience, carrying around loads of cash can be horrifying, risky and dangerous. From the risk of theft to accidents chances of losing the money are immense. Digital wallets offer a perfect solution where shopping becomes an exiting affair without the fear of losing out money ad as well ensuring that individual and personal information remains safe from hackers. This is made possible by ensuring that the user has own and unique user name and password to use while accessing the wallet services.