Save Money Using An E-Wallet
E-Wallets can come in very handy to control your expenses, track your monthly budget, categorise your account’s activity, pay bills, access promotional codes and cashback offers, manage different currencies, and more.
A digital wallet (or e-wallet) is a type of software that allows buyers to make quick digital transactions by securely storing their payment and password information. Think of a digital wallet as an online bank account that can be used to make payments and store payment history. Users can deposit money into a digital wallet directly or connect it to their banks.
A digital wallet can do more than complete transactions. It can also store gift cards, loyalty cards, identification, boarding passes, tickets, and anything else you would keep in a physical wallet.
How Does A Digital Wallet Work?
A digital wallet is a link between your payment information and the merchant that you’re transacting with. First, a digital wallet collects a user’s personal data, such as:
· Driver’s license
· Social security number
· Insurance data
· Loyalty cards
· Any other documents needed for identification.
The data is then passed wirelessly to a merchant via near-field communication (NFC). That’s the “tap” between your smartphone and the merchant’s point-of-sale system at checkout. Digital wallets have both a hardware and a software component. To ensure digital payments are secure, the software encrypts your personal data; the hardware provides all of the essential functionality to transfer data from your device to the merchant.
A digital wallet also contains a database that stores user data, which is then shared with the merchant. This includes information like:
· Credit card information
· Gift cards
· Shipping address
· Billing address
· Contact information
Having an e-wallet account is becoming as popular as owning a credit card and it’s no wonder why. As customer needs become increasingly global, e-wallets provide a range of easy online payment methods to fill the gaps left by traditional banking. Transfers that used to take days with a credit card can go through instantly using an e-wallet. But it’s not just that – e-wallets offer lower fees, better protection, and great rewards to their users. Let’s take a close look at the key benefits.
The Rise Of E-Wallets
At first, e-wallets focused on facilitating transactions rather than storing funds. Think of PayPal, one of the earliest and most popular examples of an e-wallet. PayPal made online payments easier, but its platform didn’t provide incentives to keep a balance within PayPal itself. As fintech evolved, however, the initial e-wallet concept grew closer to its physical predecessor. Nowadays, e-wallet account holders can deposit, transfer and store funds. Moreover, they receive rewards, bonuses, and cashback opportunities for doing so.
For industries like Forex trading and online gaming, the evolution of the e-wallet has been a game-changer. It allows Forex traders to instantly add funds from an e-wallet to their Forex account and react quickly when they spot opportunities. Additionally, traders can store a range of currencies in their e-wallet, including cryptocurrencies. Moreover, you can deposit a wide range of currencies into a global e-wallet and navigate your account in a variety of languages. Best of all, you can make transfers, deposits, and withdrawals all from your mobile device. And the cashback rewards you can earn as you play are an undeniable bonus.
How To Save Money With An E-Wallet?
Here are six things you can do with a digital wallet to help manage your spending.
1. Set a savings goal.
Saving money can be challenging but it’s a good idea to have around three to six months’ worth of your living expenses as a rainy-day fund in case you lose your job or have unforeseen expenses. Some digital wallet apps will enable users to create savings goals and make it easier for them to hit savings targets by implementing roundup and automatic deposit functions.
2. Set a budget for each category of spending.
Having an overall spending budget per month is good, but breaking that budget down by each major spending category is even better. Creating different spend buckets makes you think harder about your expenses, meaning you are less likely to overspend. If your expense tracking shows overspending in one category, you can consciously choose to offset this by making savings in another area.
3. Create new categories to track spending in more detail.
When you measure something, you can affect it. A scientific principle that can be extrapolated to a myriad of things. By tracking your spending against a budget, you will gain a better understanding of where you are spending unnecessarily and where you can start to make changes that make a difference. Your digital wallet is much more than simply a storage area for your digital cards because the added features mean you can drill into your transactions and learn about your spending habits. And when you know what you are currently doing, it’s much easier to adjust, change your habits, and improve your situation.
4. Set a reminder when you are close to your budget.
Another helpful feature of some digital wallets is the option to set an alert that tells you when your spending has reached a certain percentage of your budget for the month. This helps you to avoid overspending. If you are receiving your alert earlier in the budgeted month or year than expected, then you know you need to quickly rein in your spending to stay within your budget.
5. Set a reminder when bills are due for payment.
Life is busy and it’s easy to forget tasks on your to-do list, so why not have your digital wallet remind you when payments are due? Some wallets allow you to set reminders so that you don’t forget to pay your bills, which could save you from added penalty interest or fees.
6. Access to exclusive discounts or rewards.
Digital wallet providers often offer discounts or rewards with retailers or outlets that only their users can access. You might get money off or loyalty points which can be exchanged for free products or discounts. When the costs of living are increasing, any service that provides some cash or value back is welcome.
Best features of E-Wallets in 2023
Contactless: Firstly, in this time of Covid-19, a major benefit of e-wallets is that it’s contactless!
Security: E-wallets are also safer because you don’t have to carry as much cash. Also, if you lose your phone, you can still keep your cash in your e-wallet safe, but make sure you secure all your e-wallets by setting a password for each one. Some phones allow you to use your fingerprint or face ID instead of a password.
Tracks spending: Unlike cash and even card payments where you get paper receipts that might be hard to record, with an e-wallet you can track all your transactions. Tracking your transactions will help you plan your budget – and stick to it!
Rewards and cashback: You can get benefits such as cashback or reward points. List down places you usually go to, check which e-wallets have the best deals for these places, and download them. This way you get the most out of each e-wallet.
The Bottom Line
If you are looking for a fast, flexible, and cost-efficient online payment method, creating an e-wallet account is the way forward for you. We have learned that E-Wallets come in especially handy when you need aid to manage your funds, track your expenses and stick to saving goals. That is why E-Wallet usage is growing worldwide!