A digital wallet has mainly two components: software and information.
The software component stores the customer’s personal information and provides security and encryption of data. The information component, in return, maintains a database of the data provided by the consumer, which consists of a list of details like names, shipping address, payment methods, and debit/credit details.
To set up a digital wallet, the consumer first has to install the application on its device. After this, it is required to complete the registration procedure. Once the setup has complete, the individual can add the money into the digital wallet the user no longer needs to enter online banking/debit card/credit card details on different websites.
You can also store the payment methods online and load money onto the wallet. One key benefit of loading the money is that whenever the consumer transacts using the wallet, the amount directly deducts from the balance present in the wallet.
Digital wallets or e-wallets has transformed the way users pay for various goods and services. Digital payments are gradually becoming a way of life, and according to economists and scholars, in the future digital payments potentially can become the most sought-after type of payment mechanism. Since the focus is shifting towards a cashless economy and a digital future in India, its government has taken various measures to encourage and promote this technology. For example, such technology is made possible through the invention of various government-backed digital payment apps like BHIM app or the Unified Payments Interface (UPI) payments app.