The document provides a comprehensive guide to digital wallets, also known as e-wallets, highlighting their significance in facilitating cashless transactions in India. It explains the usage of digital wallets, the necessity for KYC verification, and the security features that protect consumer information. Additionally, it discusses the benefits for both consumers and merchants, including frictionless transactions and integrated payment options, emphasizing the rise of digital payments and the need for secure payment processing systems.

1. A Comprehensive guide to
understanding Digital Wallets
What is a Digital Wallet?
Digital Wallet is the most popular form of Prepaid Payment
Instrument (PPI) used in India. Also referred to as an e-wallet, the
digital wallet is an easy way to carry cash in digital format. It is
generally a software application or electronic device that securely
stores payment information and prepaid money. The increased
mobility offers several added advantages to the consumers in the
new digital age that is fuelled by FinTech innovations for driving a
cashless economy.
Digital Wallet is convenient & a versatile option for making
payments with just a wave or tap of the smart phone in brick &
mortar stores, for online purchases, or via a mobile application.
According to Statista , the volume of mobile wallet transactions
experienced a significant increase from 32.7 million transactions in
fiscal year 2013 to about 4 billion in fiscal year 2021. Let us
understand the significance and added advantages offered by
Digital Wallets for businesses.
How to use a Digital wallet?
All that you need for accessing the Digital Wallet is a Smart Phone
with an internet connection. It is mandated by the RBI (Reserve

2. Bank of India) to collect KYC (Know Your Customer) information in
order to gain access to Digital Wallet services offered by banks
and third-party applications. E-Wallet or Digital Wallet offers the
following convenient and accessible services to the consumer as
listed below:
1. Balance Enquiry
2. Transaction History
3. Add, Accept, & Pay money.
For Aadhaar-based KYC the end user needs to complete a Full KYC
process that includes PAN Card or Aadhaar Card verification along
with a biometric verification and other additional information as
listed in the guidelines set by CERSAI (Central Registry of
Securitisation Asset Reconstruction and Security Interest of India)
and RBI. While Full KYC Wallets offer several additional features
and benefits, Minimum-KYC Wallets (it only requires a Unique
Identification Number & Full Name) offers partial access to the
same by limiting certain features.
Are Digital Wallets Safe?
Digital Wallets are generally a mobile application that is installed in
a password protected smart phone. The Payment Applications are
secured with advanced encryption to protect the payment
information stored within them. Also, the digital wallets have
several key security features such as 2-factor authentication, OTPs
(One-time Passwords), that can be used if required.
Consumer Wallet & its Benefits

3. Digital Wallet offers multiple benefits for the end-user i.e., the
consumer. Here are few major advantages listed below.
1. Security- Digital Wallets often require biometric authentication
to access the payment information while the money remains safe
in an encrypted software application that is installed in a
password-protected smart device
2. Frictionless Transactions- Digital Wallets enable quick
transactions with simple, user-friendly UX and lesser steps to
authenticate and complete a transaction.
3. No minimum balance- Popular Digital Wallets require no
minimum balance to maintain and access its services. Depending
upon the KYC verification, consumers or end users can save as
much or as little as they prefer.
4. No Additional Charges- Popular Digital Wallets available in the
marketplace is currently free to use with Zero additional charges.
5. Diverse Transactions- Wallets can access diverse transactions
from a single app- from paying bills to completing an e-commerce
purchase online.

4. Merchant Wallet & its Business Benefits
Similar to the consumer wallet, Merchant Wallets aid in payment
transactions from customers and have a few more functionalities
that is beneficial to merchants. The Digital Wallet, for both- single
and multi-merchant accounts, offer many integrated options like
loyalty programs, geolocation, product recommendations, etc. This
helps ease the customer journey to be more fluid and transparent.
Here are few ways Merchant Wallet improves user experience.
1. Switch between cash and digital payments is made easy,
convenient, and accessible for customers.
2. Accept payments from other wallets and bank accounts without
sharing personal information.
3. Improved security protection to safeguard payment information
and transactions.
4. Frictionless payment experience contributes to higher success
rate and reduced churn rate.
For Merchants- Digital Wallet Vs Payment Gateway
While Merchant Wallet offers many benefits for businesses, it is a
compounded entity that relies on digital certificates that
authenticates the identity using system, device, and application.
Whereas Payment Gateway is offered by Payment Service
Providers that allows users to choose their payment mode and
authenticate their financial details to approve a payment with
multiple layers of enhanced security features.
The rise of digital payments in the country necessitates merchants
to have secure and competent systems in place to accept and

5. process digital payments. Payment Gateway offers an end-to-end
automated solution for all the payment
requirements.Pay10 Payment Gateway unifies several payment
options like credit/debit card, net banking, UPI (Unified Payments
Interface), wallets, Payment Links, and more and provides
merchants with access to a fully analytical dashboard and top-of-
the-line security features.
Pay10 Payment Gateway with easy and hassle-free merchant
onboarding. We also provide top-of-the-line security features,
support a whole array of different payment modes, and a fully
analytical dashboard; Payment Links, Billing service, Reseller
services, Payout services, and more.
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comprehensive-guide-to-understanding-
digital-wallet.php