There are electronic wallets that allow you to create an account online and move money there through account transfers or card payments.
Then you can pay from your account to merchants or other consumers who are connected to the same system. There are other services also which you store your card details and make card payments via for example a mobile phone. An example to use is Masterpass from Mastercard. Here we describe electronic wallets that mean that you create an account online and pay to others who are connected via the same system.
Advantages and Disadvantages of an Electronic Wallet
An advantage of an electronic wallet is that you can easily pay for a particular service without exposing your card number. The condition is that both you and the payee are connected to the same system.
The disadvantage is that the scope of use is limited and that you have to keep track of many different passwords etc. in various electronic wallets.
Paypal is by far the largest electronic wallet in the world, Paypal with over 100 million users in more than 200 countries.
Cryptocurrencies use electronic wallets. These types of services are also used to store and pay for cryptocurrencies such as Bitcoin. In this way, the digital system wallet serves as both a savings account and a payment account for the cryptocurrency.
This activity is unregulated and is not under the supervision of any authority. Therefore, if you use Bitcoin, being a consumer subject is a risk. The value of the cryptocurrency can fluctuate widely and it happens that wallets with Bitcoin reach out for hacker strikes, resulting in consumers’ Bitcoin being lost without a chance of repayment.
The biggest disadvantage of bitcoin is that the transactions and costs, and that the system consumes a whole portion of energy.