Everyone is familiar with e-wallets, right?

In the context of buying and selling, the term “cashless” is very common these days, and everyone knows it as digital payment with no cold, hard cash involved. The terms e-wallet, mobile wallet, electronic wallet, virtual wallet, digital wallet, cashless transaction, mobile payment and other similar ones are used interchangeably among consumers and sellers. The e-wallet trend has been on the rise in many countries, and many governments are encouraging the establishment of a cashless society.

The same goes for Malaysia. Recently, the government introduced an initiative to offer eligible e-wallet users RM30 as part of the e-Tunai Rakyat programme. This is one of the steps the country has taken to move towards a cashless society. The benefits of going cashless are always highlighted by the government to attract more e-wallet users. Additionally, monetary rewards such as cashbacks and discounts by retailers are used as “bait” to encourage even more e-wallets users in the country.

However, e-wallets are not without issues. One of the main challenges for e-wallets is the same as the adoption of any new technological tool, and that is security. Though technology has revolutionised society, bringing innumerable advances as well as great convenience to daily life, it can never escape the risk of hacking by black-hat hackers with malicious intent. There is always a chance, sometimes with no plausible reason, for technology to malfunction.

Several years ago, the banking industry predicted that e-wallets will very quickly take over the role of cash and credit or debit cards (plastic cards). Despite their many advances and benefits, there are marginal consumers who are simply not ready for this change. Hence, e-wallets have not fully taken off and consumer reception and interest seem lukewarm. What are the reasons for this phenomenon? Is it right to side-track the marginalised users, especially those who are older, illiterate or too poor to afford even a mid-range smartphone?

The bottom-line is that even though e-wallets offer ease and convenience via cashless transactions, rebates and discounts, there are negative elements that need to be considered, such as security issues, technological gaps like Internet coverage as well as the problems faced by marginalised users.

Do you want to know more? Check out Chapter 63: The Challenges and Future of E-Wallet, by Dr Chiam Chooi Chea in the Encyclopedia of Criminal Activities and the Deep Web, a new publication by IGI Global that includes comprehensive articles covering multidisciplinary research and expert insights on various issues pertaining to cybercriminal activities, including the myth of the deep web.

Dr Chiam Chooi Chea has been with OUM since 2007. She has a PhD in Economics and 17 years of teaching experience. Her area of expertise is Resource Economics and she is also the Programme Director for the Bachelor of Management programme. Find out more about the programme here.

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