What Are Embedded Wallets and Wallet-as-a-Service?

The pace that digital payments has brought in making transactions is exceptional, saving crucial times of ours - after all time is money. Developers of these digital payment platforms are always trying to make the transaction as secure and fast and the experience as convenient as possible. Making transactions using digital currencies and blockchain was previously an absolute nightmare due to the technical complexities. But, all thanks to embedded wallets which were launched to address this issue and make blockchain based payments as convenient as possible.

In this post, we’ll learn what embedded wallets are, how they function and what wallet-as-a-service is.

What are Embedded Wallets?

Embedded wallets refers to the payment wallets that are directly integrated into existing platforms or applications or websites, such as digital currency exchanges, decentralized finance platforms, NFT marketplaces, games etc.

The embedded wallets have various advantages over traditional use of a third party wallet service for making transactions.

Embedded wallets discards the need of an user to download and maintain a separate digital wallet to make payments. Users can make payment in an app, website or a payment without closing the app or replying or a third party app to make the transaction happen.

Wallet-as-a-Service explained

We all have used Google Drive - a product from Google that uses an underlying technology called ‘cloud storage’. Similarly, in the context of Embedded wallets, Embedded wallet is the product that uses the underlying technology known as ‘wallet-as-a-service’.

Wallet-as-a-Service can be called the backbone of embedded wallets. The former provides developers with APIs and SDK to build the latter. APIs stands for Application Programming Interfaces that makes the way for two programs or software to communicate and send/receive information from each other.

By using the APIs and services of the wallet-as-a-service, developers can integrate the embedded wallets into the platforms.

Wallet-as-a-Service enables developers to do the following things seamlessly and provides developers with the following features -

Wallet creation: Perhaps the most obvious feature of ‘Wallet-as-a-Service’, is that it provides developers with amazing tools to build digital-currency wallets. Developers can manage not only a single blockchain wallet, but multiple blockchain wallets in more than one network without getting entangled into the complex task of developing blockchain infrastructure.
Security: For a digital-currency wallet, it is the top-most priority of developers to enable multi-layer authentication to make the wallet as secure as possible. However, developing the security infrastructure from scratch can be quite tedious and difficult. That’s why developers use wallet-as-a-service that offers pre-developed ready to integrate security protocols. Wallet-as-a-Service also makes it easy for an user to log into account through email, passwords, and other trusted login options.

Testing & integration: Developers can test and interact with multiple blockchain protocols and can enact transactions on different chains without dealing with the underlying blockchain mechanism.

Dev tools: Wallet-as-a-Service provides developers with various utility and analytical tools that helps developers understand user’s activity and interests, learn and optimize performance of the embedded wallet.
Customization: Developers can customize the embedded wallets experience easily using wallet-as-a-service APIs and SDKs and make the embedded wallets user friendly.

Embedded Wallets Use Cases

E-commerce:

Digital currencies are becoming one of the most preferred options for payments on e-commerce platforms and that’s why various e-commerce stores are now accepting payments via digital currencies.

Embedded digital currency wallets can help users to pay directly via digital currencies or digital tokens while making a checkout. This not only gives users a flexible payment option but also makes the whole process very fast as users don’t need to enter their payment details (such as credit or debit card number, PIN, CVV) every single time while making a payment.

With the help of embedded digital currency wallets, users can now make many international payments on e-commerce without the need of a remittance service. This helps businesses get international orders and receive the funds directly which otherwise was troublesome due to the use of other payment gateways which usually took a few business days to settle the funds.

Gaming platforms:

One of the finest use cases of Embedded Wallets is in the gaming industry.

Many of the popular games have their own currency, for example: Roblox has ‘Robux’, Fortnite has ‘V-bucks’, Apex Legends has ‘Apex coins’, etc.

Users use their funds to purchase these gaming currencies using their money to purchase various gaming upgrades, unlocking premium game experience.

By using embedded wallets in the games, it helps to store the gaming coins securely so that players can purchase the coins and spend the coins securely.

Use of an embedded wallet completely removes the need to rely on traditional payment methods making the purchases quick and easy so that the users can focus on their gaming rather than worrying about payments or purchases.

Virtual World:

Buying and selling of NFTs using traditional payment methods can be a really frustrating task as you need to spend minutes to enter your payments information and get that payment done. Use of an embedded wallet in the NFT platforms eliminates all these hassles.

Users can buy and sell NTFs by using funds from the embedded wallets. They don’t even need to worry about the funds to settle in their bank account after selling an NFT.

Embedded wallet makes the managing of funds convenient not only for the users but also for the NFT platforms. NFT platforms can save money from payment gateway charges by integrating an embedded wallet into their platform.

Quick Commerce and Cab-Apps:

Businesses like quick commerce and cab-apps, where speed is the key, can leverage the usefulness of embedded wallets to help users pay on the go and store funds in their wallets to make future payments instantly.

Benefits of Wallet-as-a-Service

Keamanan:

Wallet-as-a-service offers excellent security with its prebuilt security protocons, encryptions and regulations. Its in-built fraud detection tactiques helps to identify fraudulent transactions further enhancing the security and integrity of transactions.

Cost minimization:

If a business wants to build their own digital wallet from absolute scratch, it’s not only a time consuming process, but also something that requires significant investment and constant maintenance and upgrades. A wallet-as-a-service provides business with a kind-of pre-built infrastructure that can be used to deploy an embedded wallet with very little development (as compared to the previous approach).

User experience:

As mentioned earlier, an embedded wallet is very much convenient to the user as compared to using 3rd-party wallets for payments. Various features of an embedded wallet including direct payment from the embedding platform, international payments, reduces the hassle of an user promoting the retention of the user in the platform.

Kesimpulan

Due to various factors, Embedded Wallets are becoming the first choice of developers while choosing a wallet for their platforms. Many e-commerce platforms, online gaming platforms have already started owning and integrating this technology in their system and in the future, we can only expect the use of embedded wallets and wallet-as-a-service to rise further.

Pertanyaan yang Sering Diajukan

What are the main features of a Wallet-as-a-Service?

Answer: The main features of a Wallet-as-a-Service are the following:

It lets devs create wallets in an easier way.
Comes with its own APIs and SDKs which makes the development of the wallet fast and quick.
It comes with various security options that enhance the security of the apps.

What should a business use embedded wallets instead of traditional payment options?

Answer: Here are the reasons why a business should use embedded wallets instead of traditional payment options like credit cards, net banking -

Doesn’t require the user to switch between apps to make payments.
Increases payment security.
Supports international payments.

How secure are embedded wallets?

Answer: Embedded wallets come with advanced encryption methods, enhanced authentication and fraud detection features - all these security measures make embedded wallets very secure.

Where are the platforms where embedded wallets can be used?

Answer: Embedded wallets can be used in a wide-range of apps and platforms - gaming platforms, NFTs, e-commerce are its best implementation factors.

Do embedded wallets only support digital currencies?

Answer: No, embedded wallets aren’t only meant for digital currencies like Bitocin or Ethereum. Embedded wallets are an all-in-one platform where users can deposit traditional currencies and digital currencies according to their will. And, most embedded wallets are able to convert traditional currencies into digital currencies and vice-versa.