A digital wallet has both a software and information component. The software provides security and encryption 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 satisfaction of their overall purchase. The information component is basically a database of user-input information. This information consists of your shipping address, billing address, payment methods (including credit card numbers, expiry dates, and security numbers), and other information.The key point to take from digital wallets is that they're composed of both digital wallet devices and digital wallet systems. There are dedicated digital wallet devices such as the biometric wallet by Dunhill, where it's a physical device holding someone's cash and cards along with a Bluetooth mobile connection. Presently there are further explorations for smartphones with NFC digital wallet capabilities, such as the Samsung Galaxy series and the Google Nexus smartphones utilizing Google's Android operating system and the Apple Inc. iPhone 6 and iPhone 6 Plus utilizing Apple Pay.
Digital wallet systems enable the widespread use of digital wallet transactions among various retail vendors in the form of mobile payments systems and digital wallet applications. The M-PESA mobile payments system and microfinancing service has widespread use in Kenya and Tanzania, while the MasterCard PayPass application has been adopted by a number of vendors in the U.S. and worldwide.
Digital wallet is being used more and more in Asian countries as well. One in five consumers in Asia are now using digital wallet representing a twofold increase from two years ago. A recent survey by MasterCard’s mobile shopping survey shows on 8500 adults aged 18–64 across 14 markets showed, 45% users in China, 36.7% users in India and 23.3% users in Singapore are the biggest adopters of a digital wallet. The survey was conducted on between October and December 2015. Also, an analysis showed (48.5%) consumers in these regions made a purchase using smartphones. Indian consumers are leading the way with 76.4% using a smartphone to make a purchase which is a drastic increase of 29.3% from previous year. This has made companies like Reliance and Amazon India to come out with its own digital wallet. Flipkart has already introduced its own digital wallet.
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