Users can also withdraw the funds into a bank account. Semi-closed mobile wallets allow users to use the funds in the wallet to make payments for transactions with multiple merchants, as long as there is an existing contract between the merchant and the mobile wallet company. An example of a closed wallet is Amazon Pay. Users cannot use the money to make payments for transactions with other merchants and third-party service providers or withdraw the funds in cash. Closed walletsĬlosed wallets are linked to specific merchants, and users can only use the funds to make payments for transactions initiated with the specific merchant. An example of an open mobile wallet is PayPal, which allows users to make payments for in-store and online purchases and still withdraw the funds in cash. Open wallets allow customers to use the funds in the mobile wallet for making payments for transactions or withdrawing the funds deposited to the account in cash. Open walletsĪn open wallet is used directly by a bank or through a third party. The following are the main types of mobile wallets: 1. The action is triggered when the user taps or waves the NPC-enabled device at the merchant’s point-of-service terminal. The NFC uses a QR code, key, or another personal identification format to process the payment at the payment terminal. ![]() When a customer makes an in-store payment, the mobile app uses near-field communication (NFC) technology to communicate between devices. The information is then linked to an accepted personal identification format, such as a key or a scannable QR code. Once a customer installs a mobile wallet on their mobile device, they are required to provide their credit card details, reward cards, and coupons. While physical credit and debit cards can be stolen or duplicated, mobile wallets are difficult to steal since they come with encrypted keys that may not reveal any useful information. ![]() The information stored in a mobile wallet is encrypted, making it difficult for cybercriminals to execute fraudulent activities with them.
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