What is Digital Wallet | Solidgate
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Digital Wallet

 

Digital Wallet is an application that securely stores payment information, such as payment card details, enabling them to make electronic transactions conveniently. Digital wallets can take various forms, including mobile apps, software programs, or cloud-based solutions. They streamline the payment process by allowing customers to link their payment cards or bank accounts to the digital wallet, eliminating the need to input card details for each transaction.

To use a digital wallet, customers employ biometric authentication or a PIN code, selecting the desired payment method. For online purchases, customers proceed through the business’s checkout process within their chosen mobile wallet.

In-person transactions utilize wireless technologies like NFC, MST, and QR codes to transmit payment data to card readers. The customer unlocks their device, selects the payment method, and holds the device close to the reader for quick and contactless payment. After the customer transmits payment information via these technologies, the Point of Sale (POS) terminal routes the transaction details to the payment processor. The processor then communicates with issuing and acquiring banks to complete the purchase, concluding the seamless and secure electronic payment experience facilitated by digital wallets.

A noteworthy instance of this technology is DSRP, a Mastercard innovation facilitating secure transactions for remote payments via Mastercard or Maestro PANs. DSRP transactions involve dynamic data, called a cryptogram, generated using EMV-based cryptography for heightened transaction security.

Beyond the fundamental function of facilitating transactions, digital wallets often incorporate additional features like loyalty program integration, receipt storage, and peer-to-peer payments. Robust security measures, including encryption and tokenization, safeguard users’ financial data within the digital wallet. Popular examples include Apple Pay, Google Pay, and Samsung Pay, reflecting the widespread adoption of digital wallets amid the increasing trend toward cashless transactions.

 

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