Learn All About Online Wallets, Types & their Benefits
One of the best ways to send and receive money is to use a Digital or Online based wallet. It is certain kinds of applications or software or online service that facilitate us to make transactions most conveniently.
This is the age of Digital Technology. In this era, most things are based online. Digital Wallets are one of the most innovative creations that are available to us. We can use these wallets with mobile apps, websites, or desktop-based applications.
Types of Online Wallet
Online wallets can be categorized in various ways. It depends on what purpose the E-wallet is serving to its users. There are different qualities of businesses. Based on those things, we can divide Digital wallets into five different categories.
When a company provides or develops services/apps to the customers to use their services exclusively or purchase products via the company, then it can be termed as a “Closed Wallet.” These types of wallets may not offer you cash withdrawal or redemption options.
But Companies may offer you rewards based on different types of transactions that you make with Closed Wallets. The money would only be stored in the wallets. People cannot make transactions outside of their wallets using the balance of the closed wallets.
Examples of Closed Wallets: Ola Money, Amazon Pay, etc.
There are many similarities that we can find between a Semi-Closed Wallet and a Closed Wallet. Both of their purposes are to make their clients purchase products and services via the company. But, the most distinct feature of a Semi-Closed wallet is that they offer fund transfer to other sources that closed wallets do not.
Closed Wallets have gained significant popularity among the masses. One drawback of this type of wallet is that people can make transactions to their listed locations or merchants only. Merchants have to sign contracts or agreements for the acknowledgment of the payments with the issuer.
Examples of Semi-Closed Wallets: Pay TM, Pay U Money, Google Pay, Citrus, Oxygen, etc.
Banks can only issue open Wallet services to their clients. Other companies need to collaborate with a bank to offer such services. Customers can use it for almost all types of transactions and there are not many restrictions in doing so.
With Open wallets, anyone can transfer their funds or withdraw cash from ATMs. But, in most cases, people have to possess their accounts on the same application in transferring their funds.
Examples of Open Wallets: Most of the Banking Apps, M-Pesa by ICICI and Vodafone, Pay-Zapp by HDFC Bank, etc.
Transaction of news age currencies like Cryptocurrency can be done with Crypto-based Wallets. Unlike other types of wallets, Crypto Wallets do not store any cryptocurrency. They only store users' passwords and Private Keys which are needed in the time of sending and receiving Crypto Currencies.
People can use these Crypto Wallets to proceed with transactions for Bitcoin, Ethereum, Litecoin, Dogecoin, and many other digital currencies. These currencies are being held live on the Blockchain. Only the Private Keys can determine the ownership of the money for the users.
You need to remember that if the user somehow lost his/her password and private key of Crypto Wallets, it is very hard to recover the same. You may need to hire professional Crypto Wallet Recovery Services to restore and utilize your wallet.
Types of Crypto Wallets
Two different types of Crypto based wallets are in utilization as of today. These are Hardware-based and Software/online-based.
Examples of Crypto Wallets: Electrum, Mycelium, Samurai, Coinomi, Atomic Wallet, Metamask, etc.
IoT based Wallets
The Internet of Things is known as IoT in short. IoT-based wallets are generally installed on smart wearable devices like Smart Watches, Smart Wrist Bands, Jackets, Smart Speakers, and so on. People can make transactions for virtual currencies and E-money with IoT Wallets.
Examples of IoT Wallets: Amazon Dash Buttons, Apple Wallet, Amazon Echo, etc.
Benefits of Online based Digital Wallets
- Digital Wallets have enabled us to get rid of carrying physical wallets or carrying cash for making purchases, paying bills, or other transactions.
- It allows us to send money to our loved ones even if they reside anywhere in the Globe.
- People do not need to have a bank account to make transactions as Online Wallets has reduced the importance.
- Developing countries can make participating in the Global Market because of Digital Wallets.
- Online-based Digital Wallets are one of the most secure apps right now. Most of these have multi-tiered security layers so that it is hard to get hacked. Some of these are so secure that you need expert services to recover your Crypto-based Wallet.