An e-wallet – also known as a digital wallet – is a digital-based platform that stores your payment information and passwords for bank accounts, as well as credit and debit cards to enable slick and seamless online transactions. They are increasingly used in tandem with mobile payment solutions, allowing you to buy goods and services using a native app on your smartphone device.
Today, you can use e-wallets to buy almost anything. You can combine it with a mobile payment solution to pay for your weekly groceries at Asda or Tesco or connect your e-wallet to an account with your favourite online retailers like Next or Asos, ensuring fast and convenient payments for everything from clothes to furniture. Even in the online entertainment industry, the biggest sportsbooks and online casinos like Coral Casino give users an array of choices for e-wallet payment methods, suitable for deposits and withdrawals alike.
In recent years, research has found that consumers find it harder to part with physical cash at the tills than spending their hard-earned money on a debit or credit card, or digitally via an e-wallet account. With a credit card, it’s not until the end of the month that you’ll receive your monthly bill and balance, delaying the physical pain of paying for goods and services for several days, even weeks. However, with an e-wallet, it’s possible to set up instant alerts to your smartphone or email address to update your balance once a payment has been made via an e-wallet. These notifications can help to make consumers think more carefully about how much they are spending, which is perfect for those saving money.
Whether you are saving for a deposit on a house, a new family car, a summer holiday or simply a rainy day fund to give you some breathing space, e-wallets are great at improving your financial awareness in the following ways:
Monitor your monthly expenditure
Tracking your monthly outgoings is one of the easiest ways of getting an accurate picture of how much you spend and how much you need to spend. These things aren’t mutually exclusive remember. There will undoubtedly be things that you splurge on that are by no means essential. When you need to get ruthless with your spending, an e-wallet is a great starting point.
There are e-wallets that are designed to make an inventory of all your accounts, helping you to identify where you are spending. For example, the Monzo digital wallet automatically places individual payments into specific categories. When you buy some items at a supermarket using your Monzo account it will place the payment into the ‘Groceries’ category. Monzo is intuitive enough to select suitable categories based on who you are paying, but it’s possible to amend the categories yourself later on.
The Monzo app is hugely effective in monitoring from one payday to the next. Better still, within each category, you can also set monthly budgets for each. The moment you come close to breaking that budget you will be reminded by the app. The app won’t stop you from overspending, but it’s a very handy way of helping you to stay on track if you need to be responsible. For instance, it will certainly make you think twice about going out for that Friday night meal when you could have a fun night in and cook for yourselves instead.
Control your day-to-day spending
Using the Monzo digital wallet as an example again, you will always have access to a Summary screen relating to your monthly finances. It will show a pie-chart style graphic demonstrating how much money you have left to spend. Many Monzo users consider this to be their spending money chart, i.e. the money available to spend on non-essentials once all the essential bills and payments are taken care of.
Of course, another way to use e-wallets to monitor day-to-day spending is to only load what you can afford to spend into your digital wallet. E-wallets typically operate in the same way as a debit card in that they only pay out the sum of money that is preloaded or accessible, it does not offer funds in the form of credit. If you enter only the second or third week of the month and you find that you’ve already spent your preloaded funds on non-essentials, this is a sure-fire way of knowing that you need to rein in your indulgences. It takes a savvy saver not to preload more funds onto an e-wallet account, but it’s a good habit to get into if you have a savings target firmly in mind.
Benefit from discounts and cashback for using your e-wallet
Let’s face it, we all love saving money and getting cashback on our purchases, right? It’s probably the main reason you’ve entered our site. The good news is that many e-wallets manage to secure a host of discounts and cashback deals with service providers and retailers as an incentive for new customers.
For instance, Skrill now operates its very own loyalty programme that rewards its customers for every purchase they make. The Skrill Knect scheme lets Skrill accountholders accrue points and win rewards, discounts and cash vouchers to spend with partnered brands. There are seven methods of racking up points with the Skrill Knect scheme. These include spending funds with merchants, using a Skrill prepaid card, sending funds to other Skrill accounts and even trading cryptocurrencies.
Neteller also operates a Reward Points Program whereby account holders can build up points each time they transfer funds in and out of their Neteller account. These points can eventually be redeemed for cash. Neteller also has a ‘Merchant Showcase’ of online retailers and platforms that give account holders access to exclusive bonuses and discounts.
Once you get used to a life with digital wallets, you’ll be surprised how you managed your spending habits without them. As a more secure way of spending and managing your money, you’ll never regret going down the path of e-wallets to maximise every penny of your household’s hard-earned income.