Digital wallet
Encyclopedia
A digital wallet allows users to make electronic commerce transactions quickly and securely.
A digital wallet functions much like a physical wallet. The digital wallet was first conceived as a method of storing various forms of electronic money
(e-cash), but with little popularity of such e-cash services, the digital wallet has evolved into a service that provides internet
users with a convenient way to store and use online shopping information.
The term “digital wallet” is also increasingly being used to describe mobile phones, especially smartphones, that store an individual’s credentials and utilize wireless technologies such as near field communication
(NFC) to carry out financial transactions.
An individual’s bank account is usually linked to the digital wallet. They might also have their driver’s license, health card, loyalty card(s) and other ID documents stored on the phone. The credentials can be passed to a merchant’s terminal wirelessly via NFC. Certain sources are speculating that these smartphone “digital wallets” will eventually replace physical wallets. The system has already gained popularity in Japan, where digital wallets are known as Osaifu-Keitai
or “wallet mobiles”.
Researchers at the University of Toronto
's Faculty of Information have put together a "Global Overview of Digital Wallet Technologies".
for the personal information and for the actual transaction. Typically, digital wallets are stored on the client side and are easily self-maintained and fully compatible with most e-commerce Web sites. A server-side
digital wallet, also known as a thin wallet, is one that an organization creates for and about you and maintains on its servers
. Server-side digital wallets are gaining popularity among major retailers due to the security, efficiency, and added utility it provides to the end-user, which increases their enjoyment of their overall purchase.
The information component is basically a database
of user-inputted information. This information consists of your shipping address, billing address, payment methods (including credit card numbers, expiry dates, and security numbers), and other information.
. This keeps unauthorized users from viewing personal information stored on a particular computer.
, Discover
, IBM
, Omaha Steaks
and Dell Computers.
A digital wallet functions much like a physical wallet. The digital wallet was first conceived as a method of storing various forms of electronic money
Electronic money
Electronic money is money or scrip that is only exchanged electronically. Typically, this involves the use of computer networks, the internet and digital stored value systems...
(e-cash), but with little popularity of such e-cash services, the digital wallet has evolved into a service that provides internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
users with a convenient way to store and use online shopping information.
The term “digital wallet” is also increasingly being used to describe mobile phones, especially smartphones, that store an individual’s credentials and utilize wireless technologies such as near field communication
Near Field Communication
Near field communication, or NFC, allows for simplified transactions, data exchange, and wireless connections between two devices in proximity to each other, usually by no more than a few centimeters. It is expected to become a widely used system for making payments by smartphone in the United States...
(NFC) to carry out financial transactions.
An individual’s bank account is usually linked to the digital wallet. They might also have their driver’s license, health card, loyalty card(s) and other ID documents stored on the phone. The credentials can be passed to a merchant’s terminal wirelessly via NFC. Certain sources are speculating that these smartphone “digital wallets” will eventually replace physical wallets. The system has already gained popularity in Japan, where digital wallets are known as Osaifu-Keitai
Osaifu-Keitai
, literally meaning "Wallet Mobile", is a trademark of NTT DoCoMo, which developed the system. It refers to mobile phones that integrate Sony's Mobile FeliCa ICs, as well as to services provided by applications on these phones....
or “wallet mobiles”.
Researchers at the University of Toronto
University of Toronto
The University of Toronto is a public research university in Toronto, Ontario, Canada, situated on the grounds that surround Queen's Park. It was founded by royal charter in 1827 as King's College, the first institution of higher learning in Upper Canada...
's Faculty of Information have put together a "Global Overview of Digital Wallet Technologies".
Technology
A digital wallet has both a software and information component. The software provides security and encryptionEncryption
In cryptography, encryption is the process of transforming information using an algorithm to make it unreadable to anyone except those possessing special knowledge, usually referred to as a key. The result of the process is encrypted information...
for the personal information and for the actual transaction. Typically, digital wallets are stored on the client side and are easily self-maintained and fully compatible with most e-commerce Web sites. A server-side
Server-side
Server-side refers to operations that are performed by the server in a client–server relationship in computer networking.Typically, a server is a software program, such as a web server, that runs on a remote server, reachable from a user's local computer or workstation...
digital wallet, also known as a thin wallet, is one that an organization creates for and about you and maintains on its servers
Server (computing)
In the context of client-server architecture, a server is a computer program running to serve the requests of other programs, the "clients". Thus, the "server" performs some computational task on behalf of "clients"...
. Server-side digital wallets are gaining popularity among major retailers due to the security, efficiency, and added utility it provides to the end-user, which increases their enjoyment of their overall purchase.
The information component is basically a database
Database
A database is an organized collection of data for one or more purposes, usually in digital form. The data are typically organized to model relevant aspects of reality , in a way that supports processes requiring this information...
of user-inputted information. This information consists of your shipping address, billing address, payment methods (including credit card numbers, expiry dates, and security numbers), and other information.
Setup and use
A client side digital wallet requires minimal setup and is relatively easy to use. Once the software is installed, the user begins by entering all the pertinent information. The digital wallet is now setup. At the purchase/check-out page of an e-commerce site, the digital wallet software has the ability to automatically enter the user information in the online form. By default, most digital wallets prompt when the software recognizes a form in which it can fill out, if you chose to fill out the form automatically, you will be prompted for a passwordPassword
A password is a secret word or string of characters that is used for authentication, to prove identity or gain access to a resource . The password should be kept secret from those not allowed access....
. This keeps unauthorized users from viewing personal information stored on a particular computer.
ECML
Digital wallets are designed to be accurate when transferring data to retail checkout forms; however, if a particular e-commerce site has a peculiar checkout system, the digital wallet may fail to properly recognize the forms fields. This problem has been eliminated by sites and wallet software that use ECML technology. Electronic Commerce Modeling Language is a protocol that dictates how online retailers structure and setup their checkout forms. Participating e-commerce vendors who incorporate both digital wallet technology and ECML include: MicrosoftMicrosoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
, Discover
Discover Financial
Discover Financial Services is an American financial services company, which issues the Discover Card and operates the Discover and Pulse networks...
, IBM
IBM
International Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...
, Omaha Steaks
Omaha Steaks
is a direct marketer of meat, food seasonings, cookbooks and pet food in the USA. Founded in 1917 as a single butcher shop in Omaha, Nebraska, Omaha Steaks is a fifth-generation, privately held family business, that is now one of America’s largest marketers of beef...
and Dell Computers.
Advantages for e-commerce sites
Upwards of 25% of online shoppers abandon their order due to frustration in filling in forms. (Graphic Arts Monthly, 1999) The digital wallet combats this problem by giving users the option to transfer their information securely and accurately. This simplified approach to completing transactions results in better usability and ultimately more utility for the customer.See also
- BilleoBilleo-External links:****...
- BitcoinBitcoinBitcoin is a decentralized, peer-to-peer network over which users make transactions that are tracked and verified through this network. The word Bitcoin also refers to the digital currency implemented as the currency medium for user transactions over this network...
- Electronic cashElectronic cashElectronic cash is the debit card system of the German Central Credit Committee, the association which represents the top German financial interest groups. Usually paired with a checking account, cards with an Electronic Cash logo are only handed out by proper credit institutions...
- Electronic commerceElectronic commerceElectronic commerce, commonly known as e-commerce, eCommerce or e-comm, refers to the buying and selling of products or services over electronic systems such as the Internet and other computer networks. However, the term may refer to more than just buying and selling products online...
- MicropaymentMicropaymentA micropayment is a financial transaction involving a very small sum of money and usually one that occurs online. PayPal defines a micropayment as a transaction of less than 12 USD while Visa prefers transactions under 20 Australian dollars, and though micropayments were originally envisioned to...
- MoneyMoneyMoney is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past,...
- MoneybookersMoneybookersMoneybookers is an e-commerce business that allows payments and money transfers to be made through the Internet. It serves as an electronic alternative to traditional paper methods such as cheques and money orders. Moneybookers performs payment processing for websites, online auction sites, and...
- NETELLERNetellerOptimal Payments PLC, formerly known as Neovia Financial PLC, is a British global payments company based in the Isle of Man and regulated in the United Kingdom...
- PaypalPayPalPayPal is an American-based global e-commerce business allowing payments and money transfers to be made through the Internet. Online money transfers serve as electronic alternatives to paying with traditional paper methods, such as checks and money orders....