Deep, deep dive
How many types of e-wallets are there?
While there are many companies that have e-wallets, there are two main types of e-wallets.
Closed loop e-wallets
Closed loop e-wallets can only be used at the store providing the wallet and are usually tied to the store’s loyalty programme. So, you would only be allowed to collect & redeem points if you use their e-wallet. For example, Starbucks has a loyalty programme that gives you points if you use its e-wallet to buy drinks, while the AEON wallet, which you can only use at AEON stores, allows you to collect points which can be converted to cash.
Open loop e-wallets
You can use open loop e-wallets at any shop or online store, known as merchants, that have partnered with the e-wallet you have chosen, and not only in one store. Companies like Boost, GrabPay and Touch ‘n’ Go are among companies that provide open loop e-wallets. If a company has not partnered with a specific merchant, you won’t be able to use that e-wallet there, so be sure to check which e-wallets are accepted at the merchants you’re buying from.
So, which type of e-wallet should you get?
Using a closed loop e-wallet could mean collecting more points and getting more rewards. But it would mean locking your money up in a wallet that you could only use in a specific store, limiting access to your money. So, you could end up spending more money than you need to just to collect rewards.
A good workaround is to have both types of e-wallets, but only top up how much you think you will spend in a closed loop e-wallet and put the rest in an open loop e-wallet which you could use in more outlets.