How Do E-Wallets Work?
I'm building a service that requires an E-wallet and i'm wondering how exactly they work when it comes to depositing and withdrawing. My understanding is that someone deposits money, the payment processor takes their cut and the remainder is sent to your bank account where it is linked up to the E-wallet and updated accordingly.
However the amount received is less than the amount i have to updated the E-wallet with which means I've lost money before I've made money. Is this correct? Am i supposed to charge the customer to cover this processing cost?
Are there payment processors with lower fees or other ways of doing this? I'm really not sure how it all works, but with my thin margins i'm trying to find ways to reduce the fees.
Thank you
A digital wallet (or e-wallet) is a type of software that allows buyers to make quick digital transactions on multiple platforms or websites by securely storing their payment and password information. A consumer can deposit money into a digital wallet directly or it can be connected to their bank account
It depends on what you're using the wallet for.
Are your users who hold credit in their wallets going to buy digital products or services from you? Then I'd eat the processing fee and just raise your prices by roughly the same percentage.
But if your users are going to use their credit to buy stuff that you have to buy from others (for example if you're working on a marketplace with external sellers who won't accept you taking a cut, or if you have to buy physical products that you're selling without much profit), then you can't really handle it that way. Users need to get the full amount they've paid, and the sellers on your website need to be able to receive that full amount. In this case, I'd make the users pay. On your credit top up page, be very clear about the percentage you're adding to each transaction. You don't want people to think they've caught you doing something bad, so it's best to be very forthright about what you're doing.
My service is a gambling app so i can't really raise the prices. I'll make sure its clear on the deposit page the fee they will pay.