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What is the difference between an e-wallet and mobile wallet?

2019-05-24 09:54 Friday

If you want to simplify how you make payments when you are out and about – and you don't want to carry cash and credit cards with you all the time – you may want to consider using an e-wallet, also known as a digital wallet.

e-wallet and mobile wallet

An e-wallet is a payment system that can be used for paying for a range of different services, from a latte at your favorite coffee shop, to your day ticket on the Metro or a sports magazine at the local grocery store.

Digital mobile payment systems protect your banking information and passwords, and allow you to make transactions safely without worrying about taking cash or remembering how much you've got in your pocket.

The risk with a physical wallet is a thief could grab it and get access to your credit cards in seconds and spend your paper money in an instant. But digital wallets feature encrypted credit card and banking information to safeguard them from hackers.

Furthermore, if somebody steals your phone, a passcode or biometric authentication such a fingerprint would still be needed to get access the funds at a pay point. Every time you use an app such as Apple Pay it requires the owner to verify their biometric data or password before the funds are confirmed.

So, as well as being more convenient, mobile wallets can actually be safer and more secure. If you lose your phone, gaining access to your lost money is as simple as reinstalling the app on a new device.

Although mobile wallets are often called e-wallets, there is a major difference: A mobile wallet is a mobile payment app that is stored on your phone and most often used outside the home, while an e-wallet can be found on a desktop, laptop and a mobile device and is more commonly used for paying for services or ordering items for home delivery.

One of the main advantages of using an e-wallet instead of a credit or debit card or cash is the added convenience. "The struggle of dividing checks during group dinners or gathering cash for a March Madness bracket is now easily remediated by logging onto the app and electronically sending them money, which transfers directly from your bank account," notes Jared Weitz, founder and CEO of United Capital Source, a small business lender.

Weitz says he likes using Apple Pay, available through the Apple App Store. Weitz says he uses it whenever possible.

There are other common digital wallet apps, including many bank and credit card apps. Any website you use to make payments when using a checkout online, such as Google Pay, Venmo, PayPal, Square or Apple Pay, are – roughly speaking – considered e-wallets.

Are you contemplating swapping cash and credit cards for a digital wallet? Read on to learn about the key advantages and some more tips for beginners.

With an e-wallet, you can access it from your desktop, laptop or smartphone. It could be the app you use for your online bank account. If you have one of those, you may have an e-wallet already.

Conversely, a mobile wallet is an app that's specifically designed for smartphone users – in China the most popular examples are WeChat Pay and Alipay. However, many mobile wallets are also e-wallets, because you can use them with smartphones and on a desktop browser.

You can set up most e-wallets through your bank or through an app on your smartphone. Generally, you download an app or go to the website of a fintech payment provider and follow the instructions by entering your banking or credit card information. Many financial institutions that aren't banks offer digital wallets, too, including digital currency cross-border payment exchanges such as Transferwise.

Some of the many popular digital wallets include Apple Pay, Google Pay, Samsung Pay, Zelle and Venmo. Typically, digital wallets are free to use, but some charge extra for different services. For instance, some impose a standard 3% fee for sending money to another person with a credit card, or withdrawing money to your own bank account.

There are also digital wallets that enable you to store cryptocurrency, like Coinbase, which allows you to convert digital currency into cash and vice versa, commonly using a blockchain QR code.

Another major perk of digital wallets is additional savings or deals. Some digital wallets, for example, the Starbucks pay app and Amazon Pay, are digital wallets that offer bonuses like loyalty points and coupons when you use them.

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